[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2006 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
7
Parts 210 to 299
Revised as of January 1, 2006
Agriculture
________________________
Containing a codification of documents of general
applicability and future effect
As of January 1, 2006
With Ancillaries
Published by:
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 7:
Subtitle B--Regulations of the Department of Agriculture
(Continued)
Chapter II--Food and Nutrition Service, Department
of Agriculture 5
Finding Aids:
Material Approved for Incorporation by Reference........ 985
Table of CFR Titles and Chapters........................ 987
Alphabetical List of Agencies Appearing in the CFR...... 1005
List of CFR Sections Affected........................... 1015
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume, use title,
part, and section number.
Thus, 7 CFR 210.1 refers
to title 7, part 210,
section 1.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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To determine whether a Code volume has been amended since its
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
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This material, like any other properly issued regulation, has the force
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What is a proper incorporation by reference? The Director of the
Federal Register will approve an incorporation by reference only when
the requirements of 1 CFR part 51 are met. Some of the elements on which
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(a) The incorporation will substantially reduce the volume of
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(b) The matter incorporated is in fact available to the extent
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(c) The incorporating document is drafted and submitted for
publication in accordance with 1 CFR part 51.
Properly approved incorporations by reference in this volume are
listed in the Finding Aids at the end of this volume.
What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed in
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reference, please contact the agency that issued the regulation
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the revision dates of the 50 CFR titles.
[[Page vii]]
REPUBLICATION OF MATERIAL
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Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 2006.
[[Page ix]]
THIS TITLE
Title 7--Agriculture is composed of fifteen volumes. The parts in
these volumes are arranged in the following order: parts 1-26, 27-52,
53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-
1599, 1600-1899, 1900-1939, 1940-1949, 1950-1999, and part 2000 to end.
The contents of these volumes represent all current regulations codified
under this title of the CFR as of January 1, 2006.
The Food and Nutrition Service current regulations in the volume
containing parts 210-299, include the Child Nutrition Programs and the
Food Stamp Program. The regulations of the Federal Crop Insurance
Corporation are found in the volume containing parts 400-699.
All marketing agreements and orders for fruits, vegetables and nuts
appear in the one volume containing parts 900-999. All marketing
agreements and orders for milk appear in the volume containing parts
1000-1199.
For this volume, Robert J. Sheehan was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
[[Page 1]]
TITLE 7--AGRICULTURE
(This book contains parts 210 to 299)
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Part
SUBTITLE B--Regulations of the Department of Agriculture (Continued)
chapter ii--Food and Nutrition Service, Department of
Agriculture............................................... 210
[[Page 3]]
Subtitle B--Regulations of the Department of Agriculture (Continued)
[[Page 5]]
CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
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Editorial Note: Nomenclature changes to chapter II appear at 60 FR
19490, Apr. 19, 1995, and 63 FR 9727, Feb. 26, 1998.
SUBCHAPTER A--CHILD NUTRITION PROGRAMS
Part Page
210 National School Lunch Program............... 7
215 Special Milk Program for Children........... 68
220 School Breakfast Program.................... 83
225 Summer Food Service Program................. 114
226 Child and Adult Care Food Program........... 159
227 Nutrition Education and Training Program.... 257
235 State administrative expense funds.......... 266
240 Cash in lieu of donated foods............... 278
245 Determining eligibility for free and reduced
price meals and free milk in schools.... 284
246 Special Supplemental Nutrition Program for
Women, Infants and Children............. 311
247 Commodity Supplemental Food Program......... 400
248 WIC Farmers' Market Nutrition Program (FMNP) 423
SUBCHAPTER B--GENERAL REGULATIONS AND POLICIES--FOOD DISTRIBUTION
250 Donation of foods for use in the United
States, its territories and possessions
and areas under its jurisdiction........ 446
251 The Emergency Food Assistance Program....... 494
252 National Commodity Processing Program....... 506
253 Administration of the Food Distribution
Program for households on Indian
reservations............................ 515
254 Administration of the Food Distribution
Program for Indian households in
Oklahoma................................ 544
SUBCHAPTER C--FOOD STAMP AND FOOD DISTRIBUTION PROGRAM
271 General information and definitions......... 547
272 Requirements for participating State
agencies................................ 565
273 Certification of eligible households........ 621
[[Page 6]]
274 Issuance and use of coupons................. 796
275 Performance reporting system................ 837
276 State agency liabilities and Federal
sanctions............................... 877
277 Payments of certain administrative costs of
State agencies.......................... 885
278 Participation of retail food stores,
wholesale food concerns and insured
financial institutions.................. 920
279 Administrative and judicial review--food
retailers and food wholesalers.......... 946
280 Emergency food assistance for victims of
disasters............................... 949
281 Administration of the Food Stamp Program on
Indian reservations..................... 950
282 Demonstration, research, and evaluation
projects................................ 956
283 Appeals of quality control (``QC'') claims.. 957
284 Provision of a nutrition assistance program
for the Commonwealth of the Northern Mariana
Islands (CNMI) [Reserved]
285 Provision of a nutrition assistance grant
for the Commonwealth of Puerto Rico..... 976
SUBCHAPTER D--GENERAL REGULATIONS
295 Availability of information and records to
the public.............................. 980
296-299 [Reserved]
[[Page 7]]
SUBCHAPTER A_CHILD NUTRITION PROGRAMS
PART 210_NATIONAL SCHOOL LUNCH PROGRAM--Table of Contents
Subpart A_General
Sec.
210.1 General purpose and scope.
210.2 Definitions.
210.3 Administration.
Subpart B_Reimbursement Process for States and School Food Authorities
210.4 Cash and donated food assistance to States.
210.5 Payment process to States.
210.6 Use of Federal funds.
210.7 Reimbursement for school food authorities.
210.8 Claims for reimbursement.
Subpart C_Requirements for School Food Authority Participation
210.9 Agreement with State agency.
210.10 Nutrition standards and menu planning approaches for lunches and
requirements for afterschool snacks.
210.11 Competitive food services.
210.12 Student, parent and community involvement.
210.13 Facilities management.
210.14 Resource management.
210.15 Reporting and recordkeeping.
210.16 Food service management companies.
Subpart D_Requirements for State Agency Participation
210.17 Matching Federal funds.
210.18 Administrative reviews.
210.19 Additional responsibilities.
210.20 Reporting and recordkeeping.
Subpart E_State Agency and School Food Authority Responsibilities
210.21 Procurement.
210.22 Audits.
210.23 Other responsibilities.
Subpart F_Additional Provisions
210.24 Withholding payments.
210.25 Suspension, termination and grant closeout procedures.
210.26 Penalties.
210.27 Educational prohibitions.
210.28 Pilot project exemptions.
210.29 Management evaluations.
210.30 Regional office addresses.
210.31 OMB control numbers.
Appendix A to Part 210--Alternate Foods for Meals
Appendix B to Part 210--Categories of Foods of Minimal Nutritional Value
Appendix C to Part 210--Child Nutrition Labeling Program
Authority: 42 U.S.C. 1751-1760, 1779.
Source: 53 FR 29147, Aug. 2, 1988, unless otherwise noted.
Subpart A_General
Sec. 210.1 General purpose and scope.
(a) Purpose of the program. Section 2 of the National School Lunch
Act (42 U.S.C. 1751), states: ``It is declared to be the policy of
Congress, as a measure of national security, to safeguard the health and
well-being of the Nation's children and to encourage the domestic
consumption of nutritious agricultural commodities and other food, by
assisting the States, through grants-in-aid and other means, in
providing an adequate supply of food and other facilities for the
establishment, maintenance, operation, and expansion of nonprofit school
lunch programs.'' Pursuant to this act, the Department provides States
with general and special cash assistance and donations of foods acquired
by the Department to be used to assist schools in serving nutritious
lunches to children each school day. In furtherance of Program
objectives, participating schools shall serve lunches that are
nutritionally adequate, as set forth in these regulations, and shall to
the extent practicable, ensure that participating children gain a full
understanding of the relationship between proper eating and good health.
(b) Scope of the regulations. This part sets forth the requirements
for participation in the National School Lunch and Commodity School
Programs. It specifies Program responsibilities of State and local
officials in the areas of program administration, preparation and
service of nutritious lunches, payment of funds, use of program funds,
program monitoring, and reporting and recordkeeping requirements.
Sec. 210.2 Definitions.
For the purpose of this part:
[[Page 8]]
Act means the National School Lunch Act, as amended.
Afterschool care program means a program providing organized child
care services to enrolled school-age children afterschool hours for the
purpose of care and supervision of children. Those programs shall be
distinct from any extracurricular programs organized primarily for
scholastic, cultural or athletic purposes.
Attendance factor means a percentage developed no less than once
each school year which accounts for the difference between enrollment
and attendance. The attendance factor may be developed by the school
food authority, subject to State agency approval, or may be developed by
the State agency. In the absence of a local or State attendance factor,
the school food authority shall use an attendance factor developed by
FNS. When taking the attendance factor into consideration, school food
authorities shall assume that all children eligible for free and reduced
price lunches attend school at the same rate as the general school
population.
Average Daily Participation means the average number of children, by
eligibility category, participating in the Program each operating day.
These numbers are obtained by dividing (a) the total number of free
lunches claimed during a reporting period by the number of operating
days in the same period; (b) the total number of reduced price lunches
claimed during a reporting period by the number of operating days in the
same period; and (c) the total number of paid lunches claimed during a
reporting period by the number of operating days in the same period.
Child means--(a) a student of high school grade or under as
determined by the State educational agency, who is enrolled in an
educational unit of high school grade or under as described in
paragraphs (a) and (b) of the definition of ``School,'' including
students who are mentally or physically disabled as defined by the State
and who are participating in a school program established for the
mentally or physically disabled; or (b) a person under 21 chronological
years of age who is enrolled in an institution or center as described in
paragraphs (c) and (d) of the definition of ``School;'' or (c) For
purposes of reimbursement for meal supplements served in afterschool
care programs, an individual enrolled in an afterschool care program
operated by an eligible school who is 12 years of age or under, or in
the case of children of migrant workers and children with disabilities,
not more than 15 years of age.
CND means the Child Nutrition Division of the Food and Nutrition
Service of the Department.
Commodity School Program means the Program under which participating
schools operate a nonprofit lunch program in accordance with this part
and receive donated food assistance in lieu of general cash assistance.
Schools participating in the Commodity School Program shall also receive
special cash and donated food assistance in accordance with Sec.
210.4(c).
Days means calendar days unless otherwise specified.
Department means the United States Department of Agriculture.
Distributing agency means a State agency which enters into an
agreement with the Department for the distribution to schools of donated
foods pursuant to part 250 of this chapter.
Donated foods means food commodities donated by the Department for
use in nonprofit lunch programs.
Fiscal year means a period of 12 calendar months beginning October 1
of any year and ending with September 30 of the following year.
FNS means the Food and Nutrition Service, United States Department
of Agriculture.
FNSRO means the appropriate Regional Office of the Food and
Nutrition Service of the Department.
Food component means one of the four food groups which comprise
reimbursable meals planned under a food-based menu planning approach.
The four food components are: meat/meat alternate; grains/breads;
fruits/vegetables; and milk.
Food item means one of the five foods offered in lunches under a
food-based menu planning approach: meat/meat alternate; grains/breads;
two servings of fruits/vegetables; and milk.
Food service management company means a commercial enterprise or a
nonprofit organization which is or may
[[Page 9]]
be contracted with by the school food authority to manage any aspect of
the school food service.
Free lunch means a lunch served under the Program to a child from a
household eligible for such benefits under 7 CFR part 245 and for which
neither the child nor any member of the household pays or is required to
work.
Lunch means a meal service that meets the applicable nutrition
standards and portion sizes in Sec. 210.10 for lunches.
Menu item means, under Nutrient Standard Menu Planning or Assisted
Nutrient Standard Menu Planning, any single food or combination of
foods. All menu items or foods offered as part of the reimbursable meal
may be considered as contributing towards meeting the nutrition
standards provided in Sec. 210.10, except for those foods that are
considered as foods of minimal nutritional value as provided for in
Sec. 210.11(a)(2) which are not offered as part of a menu item in a
reimbursable meal. For the purposes of a reimbursable lunch, a minimum
of three menu items must be offered, one of which must be an entree (a
combination of foods or a single food item that is offered as the main
course) and one of which must be fluid milk. Under offer versus serve, a
student shall select, at a minimum, an entree and one other menu item.
If more than three menu items are offered, the student may decline up to
two menu items; however, the entree cannot be declined.
National School Lunch Program means the Program under which
participating schools operate a nonprofit lunch program in accordance
with this part. General and special cash assistance and donated food
assistance are made available to schools in accordance with this part.
Net cash resources means all monies, as determined in accordance
with the State agency's established accounting system, that are
available to or have accrued to a school food authority's nonprofit
school food service at any given time, less cash payable. Such monies
may include, but are not limited to, cash on hand, cash receivable,
earnings on investments, cash on deposit and the value of stocks, bonds
or other negotiable securities.
Nonprofit, when applied to schools or institutions eligible for the
Program, means exempt from income tax under section 501(c)(3) of the
Internal Revenue Code of 1954, as amended; or, in the Commonwealth of
Puerto Rico, certified as nonprofit by the Governor.
Nonprofit school food service means all food service operations
conducted by the school food authority principally for the benefit of
schoolchildren, all of the revenue from which is used solely for the
operation or improvement of such food services.
Nutrient Standard Menu Planning/Assisted Nutrient Standard Menu
Planning means ways to develop lunch menus based on the analysis for
nutrients in the menu items and foods offered over a school week to
determine if specific levels for a set of key nutrients and calories
were met in accordance with Sec. 210.10(i)(5). However, for the
purposes of Assisted Nutrient Standard Menu Planning, lunch menu
planning and analysis are completed by other entities and must
incorporate the production quantities needed to accommodate the specific
service requirements of a particular school or school food authority in
accordance with Sec. 210.10(j).
OIG means the Office of the Inspector General of the Department.
Point of Service means that point in the food service operation
where a determination can accurately be made that a reimbursable free,
reduced price or paid lunch has been served to an eligible child.
Program means the National School Lunch Program and the Commodity
School Program.
Reduced price lunch means a lunch served under the Program: (a) to a
child from a household eligible for such benefits under 7 CFR part 245;
(b) for which the price is less than the school food authority
designated full price of the lunch and which does not exceed the maximum
allowable reduced price specified under 7 CFR part 245; and (c) for
which neither the child nor any member of the household is required to
work.
Reimbursement means Federal cash assistance including advances paid
or payable to participating schools for lunches meeting the requirements
of Sec. 210.10 and served to eligible children.
[[Page 10]]
Revenue, when applied to nonprofit school food service, means all
monies received by or accruing to the nonprofit school food service in
accordance with the State agency's established accounting system
including, but not limited to, children's payments, earnings on
investments, other local revenues, State revenues, and Federal cash
reimbursements.
School means: (a) An educational unit of high school grade or under,
recognized as part of the educational system in the State and operating
under public or nonprofit private ownership in a single building or
complex of buildings; (b) any public or nonprofit private classes of
preprimary grade when they are conducted in the aforementioned schools;
or (c) any public or nonprofit private residential child care
institution, or distinct part of such institution, which operates
principally for the care of children, and, if private, is licensed to
provide residential child care services under the appropriate licensing
code by the State or a subordinate level of government, except for
residential summer camps which participate in the Summer Food Service
Program for Children, Job Corps centers funded by the Department of
Labor, and private foster homes. The term ``residential child care
institutions'' includes, but is not limited to: homes for the mentally,
emotionally or physically impaired, and unmarried mothers and their
infants; group homes; halfway houses; orphanages; temporary shelters for
abused children and for runaway children; long-term care facilities for
chronically ill children; and juvenile detention centers. A long-term
care facility is a hospital, skilled nursing facility, intermediate care
facility, or distinct part thereof, which is intended for the care of
children confined for 30 days or more.
School food authority means the governing body which is responsible
for the administration of one or more schools; and has the legal
authority to operate the Program therein or be otherwise approved by FNS
to operate the Program.
School week means the period of time used to determine compliance
with the nutrition standards and the appropriate calorie and nutrient
levels in Sec. 210.10. Further, if applicable, school week is the basis
for conducting Nutrient Standard Menu Planning or Assisted Nutrient
Standard Menu Planning for lunches as provided in Sec. 210.10(i) and
Sec. 210.10(j). The period shall be a normal school week of five
consecutive days; however, to accommodate shortened weeks resulting from
holidays and other scheduling needs, the period shall be a minimum of
three consecutive days and a maximum of seven consecutive days. Weeks in
which school lunches are offered less than three times shall be combined
with either the previous or the coming week.
School year means a period of 12 calendar months beginning July 1 of
any year and ending June 30 of the following year.
Secretary means the Secretary of Agriculture.
7 CFR part 3015 means the Uniform Federal Assistance Regulations
published by the Department to implement OMB Circulars A-21, A-87, A-
102, A-110, and A-122; and Executive Order 12372. (For availability of
OMB Circulars referenced in this definition, see 5 CFR 1310.3.)
7 CFR part 3017 means the Department's regulation to implement
Executive Order 12549, covering governmentwide rules on suspension and
debarment as well as The Drug Free Workplace Act of 1988.
7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
7 CFR part 3052 means the Department's regulations implementing OMB
Circular A-133, ``Audits of State, Local Governments, and Non-Profit
Organizations.'' (For availability of OMB Circulars referenced in this
definition, see 5 CFR 1310.3.)
State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
[[Page 11]]
State agency means (a) the State educational agency; (b) any other
agency of the State which has been designated by the Governor or other
appropriate executive or legislative authority of the State and approved
by the Department to administer the Program in schools, as specified in
Sec. 210.3(b); or (c) the FNSRO, where the FNSRO administers the
Program as specified in Sec. 210.3(c).
State educational agency means, as the State legislature may
determine, (a) the chief State school officer (such as the State
Superintendent of Public Instruction, Commissioner of Education, or
similar officer), or (b) a board of education controlling the State
department of education.
Student with disabilities means any child who has a physical or
mental impairment as defined in Sec. 15b.3 of the Department's
nondiscrimination regulations (7 CFR part 15b).
Subsidized lunch (paid lunch) means a lunch served to children who
are either not eligible for or elect not to receive the free or reduced
price benefits offered under 7 CFR part 245. The Department subsidizes
each paid lunch with both general cash assistance and donated foods.
Although a paid lunch student pays for a large portion of his or her
lunch, the Department's subsidy accounts for a significant portion of
the cost of that lunch.
Yogurt means commercially prepared coagulated milk products obtained
by the fermentation of specific bacteria, that meet milk fat or milk
solid requirements and to which flavoring foods or ingredients may be
added. These products are covered by the Food and Drug Administration's
Definition and Standard of Identity for yogurt, lowfat yogurt, and
nonfat yogurt, 21 CFR 131.200, 21 CFR 131.203, and 21 CFR 131.206,
respectively.
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12580, Mar. 28, 1989; 56
FR 32939, July 17, 1991; 58 FR 42487, Aug. 10, 1993; 60 FR 31207, June
13, 1995; 62 FR 10189, Mar. 6, 1997; 64 FR 50740, Sept. 20, 1999; 65 FR
26912, May 9, 2000]
Sec. 210.3 Administration.
(a) FNS. FNS will act on behalf of the Department in the
administration of the Program. Within FNS, the CND will be responsible
for Program administration.
(b) States. Within the States, the responsibility for the
administration of the Program in schools, as defined in Sec. 210.2,
shall be in the State educational agency. If the State educational
agency is unable to administer the Program in public or private
nonprofit residential child care institutions or nonprofit private
schools, then Program administration for such schools may be assumed by
FNSRO as provided in paragraph (c) of this section, or such other agency
of the State as has been designated by the Governor or other appropriate
executive or legislative authority of the State and approved by the
Department to administer such schools. Each State agency desiring to
administer the Program shall enter into a written agreement with the
Department for the administration of the Program in accordance with the
applicable requirements of this part; part 235; part 245; parts 15, 15a,
15b, and 3015 of Departmental regulations; and FNS instructions.
(c) FNSRO. The FNSRO will administer the Program in nonprofit
private schools or public or nonprofit private residential child care
institutions if the State agency is prohibited by law from disbursing
Federal funds paid to such schools. In addition, the FNSRO will continue
to administer the Program in those States in which nonprofit private
schools or public or nonprofit private residential child care
institutions have been under continuous FNS administration since October
1, 1980, unless the administration of the Program in such schools is
assumed by the State. The FNSRO will, in each State in which it
administers the Program, assume all responsibilities of a State agency
as set forth in this part and part 245 of this chapter as appropriate.
References in this part to ``State agency'' include FNSRO, as
applicable, when it is the agency administering the Program.
(d) School food authorities. The school food authority shall be
responsible for the administration of the Program in schools. State
agencies shall ensure that school food authorities administer the
Program in accordance with the applicable requirements of this part;
[[Page 12]]
part 245; parts 15, 15a, 15b, and 3015 of Departmental regulations; and
FNS instructions.
Subpart B_Reimbursement Process for States and School Food Authorities
Sec. 210.4 Cash and donated food assistance to States.
(a) General. To the extent funds are available, FNS will make cash
assistance available in accordance with the provisions of this section
to each State agency for lunches and meal supplements served to children
under the National School Lunch and Commodity School Programs. To the
extent donated foods are available, FNS will provide donated food
assistance to distributing agencies for each lunch served in accordance
with the provisions of this part and part 250 of this chapter.
(b) Assistance for the National School Lunch Program. The Secretary
will make cash and/or donated food assistance available to each State
agency and distributing agency, as appropriate, administering the
National School Lunch Program, as follows:
(1) Cash assistance for lunches: Cash assistance payments are
composed of a general cash assistance payment, authorized under section
4 of the Act, and a special cash assistance payment, authorized under
section 11 of the Act. General cash assistance is provided to each State
agency for all lunches served to children in accordance with the
provisions of the National School Lunch Program. Special cash assistance
is provided to each State agency for lunches served under the National
School Lunch Program to children determined eligible for free or reduced
price lunches in accordance with part 245 of this chapter. The total
general cash assistance paid to each State for any fiscal year shall not
exceed the lesser of amounts reported to FNS as reimbursed to school
food authorities in accordance with Sec. 210.5(d)(3) or the total
calculated by multiplying the number of lunches reported in accordance
with Sec. 210.5(d)(1) for each month of service during the fiscal year,
by the applicable national average payment rate prescribed by FNS. The
total special assistance paid to each State for any fiscal year shall
not exceed the lesser of amounts reported to FNS as reimbursed to school
food authorities in accordance with Sec. 210.5(d)(3) or the total
calculated by multiplying the number of free and reduced price lunches
reported in accordance with Sec. 210.5(d)(1) for each month of service
during the fiscal year by the applicable national average payment rate
prescribed by FNS. In accordance with section 11 of the Act, FNS will
prescribe annual adjustments to the per meal national average payment
rate (general cash assistance) and the special assistance national
average payment rates (special cash assistance) which are effective on
July 1 of each year. These adjustments, which reflect changes in the
food away from home series of the Consumer Price Index for all Urban
Consumers, are annually announced by Notice in July of each year in the
Federal Register. FNS will also establish maximum per meal rates of
reimbursement within which a State may vary reimbursement rates to
school food authorities. These maximum rates of reimbursement are
established at the same time and announced in the same Notice as the
national average payment rates.
(2) Donated food assistance. For each school year, FNS will provide
distributing agencies with donated foods for lunches served under the
National School Lunch Program as provided under part 250 of this
chapter. The per lunch value of donated food assistance is adjusted by
the Secretary annually to reflect changes as required under section 6 of
the Act. These adjustments, which reflect changes in the Price Index for
Foods Used in Schools and Institutions, are effective on July 1 of each
year and are announced by Notice in the Federal Register in July of each
year.
(3) Cash assistance for meal supplements. For those eligible schools
(as defined in Sec. 210.10(n)(1)) operating afterschool care programs
and electing to serve meal supplements to enrolled children, funds shall
be made available to each State agency, each school year in an amount no
less than the sum of the products obtained by multiplying:
[[Page 13]]
(i) The number of meal supplements served in the afterschool care
program within the State to children from families that do not satisfy
the income standards for free and reduced price school meals by 2.75
cents;
(ii) The number of meal supplements served in the afterschool care
program within the State to children from families that satisfy the
income standard for free school meals by 30 cents;
(iii) The number of meal supplements served in the afterschool care
program within the State to children from families that satisfy the
income standard for reduced price school meals by 15 cents.
(4) The rates in paragraph (b)(3) are the base rates established in
August 1981 for the CACFP. FNS shall prescribe annual adjustments to
these rates in the same Notice as the National Average Payment Rates for
lunches. These adjustments shall ensure that the reimbursement rates for
meal supplements served under this part are the same as those
implemented for meal supplements in the CACFP.
(c) Assistance for the Commodity School Program. FNS will make
special cash assistance available to each State agency for lunches
served in commodity schools in the same manner as special cash
assistance is provided in the National School Lunch Program. Payment of
such amounts to State agencies is subject to the reporting requirements
contained in Sec. 210.5(d). FNS will provide donated food assistance in
accordance with part 250 of this chapter. Of the total value of donated
food assistance to which it is entitled, the school food authority may
elect to receive cash payments of up to 5 cents per lunch served in its
commodity school(s) for donated foods processing and handling expenses.
Such expenses include any expenses incurred by or on behalf of a
commodity school for processing or other aspects of the preparation,
delivery, and storage of donated foods. The school food authority may
have all or part of these cash payments retained by the State agency for
use on its behalf for processing and handling expenses by the State
agency or it may authorize the State agency to transfer to the
distributing agency all or any part of these payments for use on its
behalf for these expenses. Payment of such amounts to State agencies is
subject to the reporting requirements contained in Sec. 210.5(d). The
total value of donated food assistance is calculated on a school year
basis by adding:
(1) The applicable national average payment rate (general cash
assistance) prescribed by the Secretary for the period of July 1 through
June 30 multiplied by the total number of lunches served during the
school year under the Commodity School Program; and
(2) The national per lunch average value of donated foods prescribed
by the Secretary for the period of July 1 through June 30 multiplied by
the total number of lunches served during the school year under the
Commodity School Program.
[53 FR 29147, Aug. 2, 1988, as amended at 58 FR 42487, Aug. 10, 1993; 60
FR 31207, June 13, 1995; 65 FR 26912, May 9, 2000]
Sec. 210.5 Payment process to States.
(a) Grant award. FNS will specify the terms and conditions of the
State agency's grant in a grant award document and will generally make
payments available by means of a Letter of Credit issued in favor of the
State agency. The State agency shall obtain funds for reimbursement to
participating school food authorities through procedures established by
FNS in accordance with 7 CFR part 3015. State agencies shall limit
requests for funds to such times and amounts as will permit prompt
payment of claims or authorized advances. The State agency shall
disburse funds received from such requests without delay for the purpose
for which drawn. FNS may, at its option, reimburse a State agency by
Treasury Check. FNS will pay by Treasury Check with funds available in
settlement of a valid claim if payment for that claim cannot be made
within the grant closeout period specified in paragraph (d) of this
section.
(b) Cash-in-lieu of donated foods. All Federal funds to be paid to
any State in place of donated foods will be made available as provided
in part 240 of this chapter.
(c) Recovery of funds. FNS will recover any Federal funds made
available to the State agency under this part
[[Page 14]]
which are in excess of obligations reported at the end of each fiscal
year in accordance with the reconciliation procedures specified in
paragraph (d) of this section. Such recoveries shall be reflected by a
related adjustment in the State agency's Letter of Credit.
(d) Substantiation and reconciliation process. Each State agency
shall maintain Program records as necessary to support the reimbursement
payments made to school food authorities under Sec. 210.7 and Sec.
210.8 and the reports submitted to FNS under this paragraph. The State
agency shall ensure such records are retained for a period of 3 years or
as otherwise specified in Sec. 210.23(c).
(1) Monthly report. Each State agency shall submit a final Report of
School Program Operations (FNS-10) to FNS for each month. The final
reports shall be limited to claims submitted in accordance with Sec.
210.8 of this part. For the month of October, the final report shall
include the total number of children approved for free lunches, the
total number of children approved for reduced price lunches, and the
total number of children enrolled in participating public schools,
private schools, and residential child care institutions, respectively,
as of the last day of operation in October. The final reports shall be
postmarked and/or submitted no later than 90 days following the last day
of the month covered by the report. States shall not receive Program
funds for any month for which the final report is not submitted within
this time limit unless FNS grants an exception. Upward adjustments to a
State's report shall not be made after 90 days from the month covered by
the report unless authorized by FNS. Downward adjustments to a State's
report shall always be made regardless of when it is determined that
such adjustments are necessary. FNS authorization is not required for
downward adjustments. Any adjustments to a State's report shall be
reported to FNS in accordance with procedures established by FNS.
(2) Quarterly report. Each State agency shall also submit to FNS a
quarterly Financial Status Report (SF-269) on the use of Program funds.
Such reports shall be postmarked and/or submitted no later than 30 days
after the end of each fiscal year quarter.
(3) End of year report. Each State agency shall submit a final
Financial Status Report (SF-269) for each fiscal year. This final fiscal
year grant closeout report shall be postmarked and/or submitted to FNS
within 120 days after the end of each fiscal year or part thereof that
the State agency administered the Program. Obligations shall be reported
only for the fiscal year in which they occur. FNS will not be
responsible for reimbursing Program obligations reported later than 120
days after the close of the fiscal year in which they were incurred.
Grant closeout procedures are to be carried out in accordance with 7 CFR
part 3015.
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12580, Mar. 28, 1989; 56
FR 32939, July 17, 1991]
Sec. 210.6 Use of Federal funds.
General. State agencies shall use Federal funds made available under
the Program to reimburse or make advance payments to school food
authorities in connection with lunches and meal supplements served in
accordance with the provisions of this part; except that, with the
approval of FNS, any State agency may reserve an amount up to one
percent of the funds earned in any fiscal year under this part for use
in carrying out special developmental projects. Advance payments to
school food authorities may be made at such times and in such amounts as
are necessary to meet the current fiscal obligations. All Federal funds
paid to any State in place of donated foods shall be used as provided in
part 240 of this chapter.
[53 FR 29147, Aug. 2, 1988, as amended at 58 FR 42487, Aug. 10, 1993]
Sec. 210.7 Reimbursement for school food authorities.
(a) General. Reimbursement payments to finance nonprofit school food
service operations shall be made only to school food authorities
operating under a written agreement with the State agency. Subject to
the provisions of Sec. 210.8(c), such payments may be made for lunches
and meal supplements served in accordance with provisions of this part
and part 245 in the calendar month preceding the calendar
[[Page 15]]
month in which the agreement is executed. These reimbursement payments
include general cash assistance for all lunches served to children under
the National School Lunch Program and special cash assistance payments
for free or reduced price lunches served to children determined eligible
for such benefits under the National School Lunch and Commodity School
Programs. Reimbursement payments shall also be made for meal supplements
served to eligible children in afterschool care programs in accordance
with the rates established in Sec. 210.4(b)(3). Approval shall be in
accordance with part 245 of this chapter.
(b) Assignment of rates. At the beginning of each school year, State
agencies shall establish the per meal rates of reimbursement for school
food authorities participating in the Program. These rates of
reimbursement may be assigned at levels based on financial need; except
that, the rates are not to exceed the maximum rates of reimbursement
established by the Secretary under Sec. 210.4(b) and are to permit
reimbursement for the total number of lunches in the State from funds
available under Sec. 210.4. Within each school food authority, the
State agency shall assign the same rate of reimbursement from general
cash assistance funds for all lunches served to children under the
Program. Assigned rates of reimbursement may be changed at any time by
the State agency, provided that notice of any change is given to the
school food authority. The total general and special cash assistance
reimbursement paid to any school food authority for lunches served to
children during the school year are not to exceed the sum of the
products obtained by multiplying the total reported number of lunches,
by type, served to eligible children during the school year by the
applicable maximum per lunch reimbursements prescribed for the school
year for each type of lunch.
(c) Reimbursement limitations. To be entitled to reimbursement under
this part, each school food authority shall ensure that Claims for
Reimbursement are limited to the number of free, reduced price and paid
lunches and meal supplements that are served to children eligible for
free, reduced price and paid lunches and meal supplements, respectively,
for each day of operation.
(1) Lunch count system. To ensure that the Claim for Reimbursement
accurately reflects the number of lunches and meal supplements served to
eligible children, the school food authority shall, at a minimum:
(i) Correctly approve each child's eligibility for free and reduced
price lunches and meal supplements based on the requirements prescribed
under 7 CFR part 245;
(ii) Maintain a system to issue benefits and to update the
eligibility of children approved for free or reduced price lunches and
meal supplements. The system shall:
(A) Accurately reflect eligibility status as well as changes in
eligibility made after the initial approval process due to verification
findings, transfers, reported changes in income or household size, etc.;
and
(B) Make the appropriate changes in eligibility after the initial
approval process on a timely basis so that the mechanism the school food
authority uses to identify currently eligible children provides a
current and accurate representation of eligible children. Changes in
eligibility which result in increased benefit levels shall be made as
soon as possible but no later than 3 operating days of the date the
school food authority makes the final decision on a child's eligibility
status. Changes in eligibility which result in decreased benefit levels
shall be made as soon as possible but no later than 10 operating days of
the date the school food authority makes the final decision on the
child's eligibility status.
(iii) Base Claims for Reimbursement on lunch counts, taken daily at
the point of service, which correctly identify the number of free,
reduced price and paid lunches served to eligible children;
(iv) Correctly record, consolidate and report those lunch and
supplement counts on the Claim for Reimbursement; and
(v) Ensure that Claims for Reimbursement do not request payment for
any excess lunches produced, as prohibited in Sec. 210.10(a)(2), or
non-Program lunches (i.e., a la carte or adult
[[Page 16]]
lunches) or for more than one meal supplement per child per day.
(2) Point of service alternatives. (i) State agencies may authorize
alternatives to the point of service lunch counts provided that such
alternatives result in accurate, reliable counts of the number of free,
reduced price and paid lunches served, respectively, for each serving
day. State agencies are encouraged to issue guidance which clearly
identifies acceptable point of service alternatives and instructions for
proper implementation. School food authorities may select one of the
State agency approved alternatives without prior approval.
(ii) In addition, on a case-by-case basis, State agencies may
authorize school food authorities to use other alternatives to the point
of service lunch count; provided that such alternatives result in an
accurate and reliable lunch count system. Any request to use an
alternative lunch counting method which has not been previously
authorized under paragraph (2)(i) is to be submitted in writing to the
State agency for approval. Such request shall provide detail sufficient
for the State agency to assess whether the proposed alternative would
provide an accurate and reliable count of the number of lunches, by
type, served each day to eligible children. The details of each approved
alternative shall be maintained on file at the State agency for review
by FNS.
(d) The State agency shall reimburse the school food authority for
meal supplements served in eligible schools (as defined in Sec.
210.10(n)(1)) operating afterschool care programs under the NSLP in
accordance with the rates established in Sec. 210.4(b).
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12581, Mar. 28, 1989; 56
FR 32939, July 17, 1991; 58 FR 42487, Aug. 10, 1993; 60 FR 31207, June
13, 1995; 65 FR 26912, May 9, 2000]
Sec. 210.8 Claims for reimbursement.
(a) Internal controls. The school food authority shall establish
internal controls which ensure the accuracy of lunch counts prior to the
submission of the monthly Claim for Reimbursement. At a minimum, these
internal controls shall include: an on-site review of the lunch counting
and claiming system employed by each school within the jurisdiction of
the school food authority; comparisons of daily free, reduced price and
paid lunch counts against data which will assist in the identification
of lunch counts in excess of the number of free, reduced price and paid
lunches served each day to children eligible for such lunches; and a
system for following up on those lunch counts which suggest the
likelihood of lunch counting problems.
(1) On-site reviews. Every school year, each school food authority
with more than one school shall perform no less than one on-site review
of the lunch counting and claiming system employed by each school under
its jurisdiction. The on-site review shall take place prior to February
1 of each school year. Further, if the review discloses problems with a
school's meal counting or claiming procedures, the school food authority
shall: ensure that the school implements corrective action; and, within
45 days of the review, conducts a follow-up on-site review to determine
that the corrective action resolved the problems. Each on-site review
shall ensure that the school's claim is based on the counting system
authorized by the State agency under Sec. 210.7(c) of this part and
that the counting system, as implemented, yields the actual number of
reimbursable free, reduced price and paid lunches, respectively, served
for each day of operation.
(2) School food authority claims review process. Prior to the
submission of a monthly Claim for Reimbursement, each school food
authority shall review the lunch count data for each school under its
jurisdiction to ensure the accuracy of the monthly Claim for
Reimbursement. The objective of this review is to ensure that monthly
claims include only the number of free, reduced price and paid lunches
served on any day of operation to children currently eligible for such
lunches.
(i) Any school food authority that was found by its most recent
administrative review conducted in accordance with Sec. 210.18, to have
no meal counting and claiming violations may:
(A) Develop internal control procedures that ensure accurate meal
counts. The school food authority shall submit any internal controls
developed
[[Page 17]]
in accordance with this paragraph to the State agency for approval and,
in the absence of specific disapproval from the State agency, shall
implement such internal controls. The State agency shall establish
procedures to promptly notify school food authorities of any
modifications needed to their proposed internal controls or of denial of
unacceptable submissions. If the State agency disapproves the proposed
internal controls of any school food authority, it reserves the right to
require the school food authority to comply with the provisions of
paragraph (a)(3) of this section; or
(B) Comply with the requirements of paragraph (a)(3) of this
section.
(ii) Any school food authority that was identified in the most
recent administrative review conducted in accordance with Sec. 210.18,
or in any other oversight activity, as having meal counting and claiming
violations shall comply with the requirements in paragraph (a)(3) of
this section.
(3) Edit checks. (i) The following procedure shall be followed for
school food authorities identified in paragraph (a)(2)(ii) of this
section, by other school food authorities at State agency option, or, at
their own option, by school food authorities identified in paragraph
(a)(2)(i) of this section: the school food authority shall compare each
school's daily counts of free, reduced price and paid lunches against
the product of the number of children in that school currently eligible
for free, reduced price and paid lunches, respectively, times an
attendance factor.
(ii) School food authorities that are identified in subsequent
administrative reviews conducted in accordance with Sec. 210.18 as not
having meal counting and claiming violations and that are correctly
complying with the procedures in paragraph (a)(3)(i) of this section
have the option of developing internal controls in accordance with
paragraph (a)(2)(i) of this section.
(4) Follow-up activity. The school food authority shall promptly
follow-up through phone contact, on-site visits or other means when the
internal controls used by schools in accordance with paragraph (a)(2)(i)
of this section or the claims review process used by schools in
accordance with paragraphs (a)(2)(ii) and (a)(3) of this section suggest
the likelihood of lunch count problems. When problems or errors are
identified, the lunch counts shall be corrected prior to submission of
the monthly Claim for Reimbursement. Improvements to the lunch count
system shall also be made to ensure that the lunch counting system
consistently results in lunch counts of the actual number of
reimbursable free, reduced price and paid lunches served for each day of
operation.
(5) Recordkeeping. School food authorities shall maintain on file,
each month's Claim for Reimbursement and all data used in the claims
review process, by school. Records shall be retained as specified in
Sec. 210.23(c) of this part. School food authorities shall make this
information available to the Department and the State agency upon
request.
(b) Monthly claims. To be entitled to reimbursement under this part,
each school food authority shall submit to the State agency, a monthly
Claim for Reimbursement, as described in paragraph (c) of this section.
(1) Submission timeframes. A final Claim for Reimbursement shall be
postmarked or submitted to the State agency not later than 60 days
following the last day of the full month covered by the claim. State
agencies may establish shorter deadlines at their discretion. Claims not
postmarked and/or submitted within 60 days shall not be paid with
Program funds unless otherwise authorized by FNS.
(2) State agency claims review process. The State agency shall
review each school food authority's Claim for Reimbursement, on a
monthly basis, in an effort to ensure that monthly claims are limited to
the number of free and reduced price lunches served, by type, to
eligible children.
(i) The State agency shall, at a minimum, compare the number of free
and reduced price lunches claimed to the number of children approved for
free and reduced price lunches enrolled in the school food authority for
the month of October times the days of operation times the attendance
factor employed by the school food authority in accordance with
paragraph (a)(3) of this section or the internal controls
[[Page 18]]
used by schools in accordance with paragraph (a)(2)(i) of this section.
At its discretion, the State agency may conduct this comparison against
data which reflects the number of children approved for free and reduced
price lunches for a more current month(s) as collected pursuant to
paragraph (c)(2) of this section.
(ii) In lieu of conducting the claims review specified in paragraph
(b)(2)(i) of this section, the State agency may conduct alternative
analyses for those Claims for Reimbursement submitted by residential
child care institutions. Such alternatives analyses shall meet the
objective of ensuring that the monthly Claims for Reimbursement are
limited to the numbers of free and reduced price lunches served, by
type, to eligible children.
(3) Follow-up activity. The State agency shall promptly follow-up
through phone contact, on-site visits, or other means when the claims
review process suggests the likelihood of lunch count problems.
(4) Corrective action. The State agency shall promptly take
corrective action with respect to any Claim for Reimbursement which
includes more than the number of lunches served, by type, to eligible
children. In taking corrective action, State agencies may make
adjustments on claims filed within the 60-day deadline if such
adjustments are completed within 90 days of the last day of the claim
month and are reflected in the final Report of School Program Operations
(FNS-10) for the claim month required under Sec. 210.5(d) of this part.
Upward adjustments in Program funds claimed which are not reflected in
the final FNS-10 for the claim month shall not be made unless authorized
by FNS. Except that, upward adjustments for the current and prior fiscal
years resulting from any review or audit may be made, at the discretion
of the State agency. Downward adjustments in amounts claimed shall
always be made, without FNS authorization, regardless of when it is
determined that such adjustments are necessary.
(c) Content of claim. The Claim for Reimbursement shall include data
in sufficient detail to justify the reimbursement claimed and to enable
the State agency to provide the Report of School Program Operations
required under Sec. 210.5(d) of this part. Such data shall include, at
a minimum, the number of free, reduced price and paid lunches and meal
supplements served to eligible children. The claim shall be signed by a
school food authority official.
(1) Consolidated claim. The State agency may authorize a school food
authority to submit a consolidated Claim for Reimbursement for all
schools under its jurisdiction, provided that, the data on each school's
operations required in this section are maintained on file at the local
office of the school food authority and the claim separates consolidated
data for commodity schools from data for other schools. Unless otherwise
approved by FNS, the Claim for Reimbursement for any month shall include
only lunches and meal supplements served in that month except if the
first or last month of Program operations for any school year contains
10 operating days or less, such month may be combined with the Claim for
Reimbursement for the appropriate adjacent month. However, Claims for
Reimbursement may not combine operations occurring in two fiscal years.
If a single State agency administers any combination of the Child
Nutrition Programs, a school food authority shall be able to use a
common claim form with respect to claims for reimbursement for meals
served under those programs.
(2) October data. For the month of October, the State agency shall
also obtain, either through the Claim for Reimbursement or other means,
the total number of children approved for free lunches and meal
supplements, the total number of children approved for reduced price
lunches and meal supplements, and the total number of children enrolled
in the school food authority as of the last day of operation in October.
The school food authority shall submit this data to the State agency no
later than December 31 of each year. State agencies may establish
shorter deadlines at their discretion. In addition, the State agency may
require school food authorities to provide this data for a more current
month if for use in the State agency
[[Page 19]]
claims review process under paragraph (c)(2) of this section.
(d) Advance funds. The State agency may advance funds available for
the Program to a school food authority in an amount equal to the amount
of reimbursement estimated to be needed for one month's operation.
Following the receipt of claims, the State agency shall make
adjustments, as necessary, to ensure that the total amount of payments
received by the school food authority for the fiscal year does not
exceed an amount equal to the number of lunches and meal supplements by
reimbursement type served to children times the respective payment rates
assigned by the State in accordance with Sec. 210.7(b). The State
agency shall recover advances of funds to any school food authority
failing to comply with the 60-day claim submission requirements in
paragraph (b) of this section.
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12581, Mar. 28, 1989; 56
FR 32940, July 17, 1991; 58 FR 42487, Aug. 10, 1993; 60 FR 31207, June
13, 1995; 64 FR 50740, Sept. 20, 1999]
Subpart C_Requirements for School Food Authority Participation
Sec. 210.9 Agreement with State agency.
(a) Application. An official of a school food authority shall make
written application to the State agency for any school in which it
desires to operate the Program. Applications shall provide the State
agency with sufficient information to determine eligibility. The school
food authority shall also submit for approval a Free and Reduced Price
Policy Statement in accordance with part 245 of this chapter.
(b) Agreement. Each school food authority approved to participate in
the program shall enter into a written agreement with the State agency
that may be amended as necessary. Nothing in the preceding sentence
shall be construed to limit the ability of the State agency to suspend
or terminate the agreement in accordance with Sec. 210.25. If a single
State agency administers any combination of the Child Nutrition
Programs, that State agency shall provide each school food authority
with a single agreement with respect to the operation of those programs.
The agreement shall contain a statement to the effect that the ``School
Food Authority and participating schools under its jurisdiction, shall
comply with all provisions of 7 CFR parts 210 and 245.'' This agreement
shall provide that each school food authority shall, with respect to
participating schools under its jurisdiction:
(1) Maintain a nonprofit school food service and observe the
limitations on the use of nonprofit school food service revenues set
forth in Sec. 210.14(a) and the limitations on any competitive school
food service as set forth in Sec. 210.11(b);
(2) Limit its net cash resources to an amount that does not exceed 3
months average expenditures for its nonprofit school food service or
such other amount as may be approved in accordance with Sec. 210.19(a);
(3) Maintain a financial management system as prescribed under Sec.
210.14(c);
(4) Comply with the requirements of the Department's regulations
regarding financial management (7 CFR part 3015);
(5) Serve lunches, during the lunch period, which meet the minimum
requirements prescribed in Sec. 210.10;
(6) Price the lunch as a unit;
(7) Serve lunches free or at a reduced price to all children who are
determined by the school food authority to be eligible for such meals
under 7 CFR part 245;
(8) Claim reimbursement at the assigned rates only for reimbursable
free, reduced price and paid lunches served to eligible children in
accordance with 7 CFR part 210. Agree that the school food authority
official signing the claim shall be responsible for reviewing and
analyzing meal counts to ensure accuracy as specified in Sec. 210.8
governing claims for reimbursement. Acknowledge that failure to submit
accurate claims will result in the recovery of an overclaim and may
result in the withholding of payments, suspension or termination of the
program as specified in Sec. 210.25. Acknowledge that if failure to
submit accurate claims reflects embezzlement, willful mis ap pli ca tion
of funds, theft, or fraudulent activity, the penalties specified in
Sec. 210.26 shall apply;
(9) Count the number of free, reduced price and paid reimbursable
meals
[[Page 20]]
served to eligible children at the point of service, or through another
counting system if approved by the State agency;
(10) Submit Claims for Reimbursement in accordance with Sec. 210.8;
(11) Comply with the requirements of the Department's regulations
regarding nondiscrimination (7 CFR parts 15, 15a, 15b);
(12) Make no discrimination against any child because of his or her
eligibility for free or reduced price meals in accordance with the
approved Free and Reduced Price Policy Statement;
(13) Enter into an agreement to receive donated foods as required by
7 CFR part 250;
(14) Maintain, in the storage, preparation and service of food,
proper sanitation and health standards in conformance with all
applicable State and local laws and regulations, and comply with the
food safety inspection requirement of Sec. 210.13(b);
(15) Accept and use, in as large quantities as may be efficiently
utilized in its nonprofit school food service, such foods as may be
offered as a donation by the Department;
(16) Maintain necessary facilities for storing, preparing and
serving food;
(17) Upon request, make all accounts and records pertaining to its
school food service available to the State agency and to FNS, for audit
or review, at a reasonable time and place. Such records shall be
retained for a period of 3 years after the date of the final Claim for
Reimbursement for the fiscal year to which they pertain, except that if
audit findings have not been resolved, the records shall be retained
beyond the 3 year period as long as required for resolution of the
issues raised by the audit;
(18) Maintain files of currently approved and denied free and
reduced price applications, respectively, and the names of children
approved for free lunches based on documentation certifying that the
child is included in a household approved to receive benefits under the
Food Stamp Program, Food Distribution Program for Households on Indian
Reservations (FDPIR) or Temporary Assistance for Needy Families (TANF).
If the applications and/or documentation are maintained at the school
food authority level, they shall be readily retrievable by school;
(19) Retain the individual applications for free and reduced price
lunches and meal supplements submitted by families for a period of 3
years after the end of the fiscal year to which they pertain or as
otherwise specified under paragraph (b)(17) of this section.
(20) No later than March 1, 1997, and no later than December 31 of
each year thereafter, provide the State agency with a list of all
elementary schools under its jurisdiction in which 50 percent or more of
enrolled children have been determined eligible for free or reduced
price meals as of the last operating day the preceding October. The
State agency may designate a month other than October for the collection
of this information, in which case the list must be provided to the
State agency within 60 calendar days following the end of the month
designated by the State agency. In addition, each school food authority
shall provide, when available for the schools under its jurisdiction,
and upon the request of a sponsoring organization of day care homes of
the Child and Adult Care Food Program, information on the boundaries of
the attendance areas for the elementary schools identified as having 50
percent or more of enrolled children certified eligible for free or
reduced price meals.
(c) Afterschool care requirements. Those school food authorities
with eligible schools (as defined in Sec. 210.10(n)(1)) that elect to
serve meal supplements during afterschool care programs, shall agree to:
(1) Serve meal supplements which meet the minimum requirements
prescribed in Sec. 210.10;
(2) Price the meal supplement as a unit;
(3) Serve meal supplements free or at a reduced price to all
children who are determined by the school food authority to be eligible
for free or reduced price school meals under 7 CFR part 245;
(4) If charging for meals, the charge for a reduced price meal
supplement shall not exceed 15 cents;
(5) Claim reimbursement at the assigned rates only for meal
supplements
[[Page 21]]
served in accordance with the agreement;
(6) Claim reimbursement for no more than one meal supplement per
child per day;
(7) Review each afterschool care program two times a year; the first
review shall be made during the first four weeks that the school is in
operation each school year, except that an afterschool care program
operating year round shall be reviewed during the first four weeks of
its initial year of operation, once more during its first year of
operation, and twice each school year thereafter; and
(8) Comply with all requirements of this part, except that, claims
for reimbursement need not be based on ``point of service'' meal
supplement counts (as required by Sec. 210.9(b)(9)).
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12581, Mar. 28, 1989; 56
FR 32941, July 17, 1991; 58 FR 42488, Aug. 10, 1993; 60 FR 31208, June
13, 1995; 62 FR 901, Jan. 7, 1997; 63 FR 9104, Feb. 24, 1998; 64 FR
50740, Sept. 20, 1999; 64 FR 72471, Dec. 28, 1999; 65 FR 26912, May 9,
2000; 70 FR 34630, June 15, 2005]
Sec. 210.10 Nutrition standards and menu planning approaches for
lunches and requirements for afterschool snacks.
(a) What are the general requirements?--(1) General nutrition
requirements. Schools must provide nutritious and well-balanced meals to
all the children they serve.
(i) Requirements for lunch. For children age 2 or older, schools
must offer lunches that meet, at a minimum, the nutrition standards in
paragraph (b) of this section. Compliance with the nutrition standards
and the appropriate nutrient and calorie levels is determined by
averaging lunches planned to be offered over a school week. Under any
menu planning approach, schools must plan and produce at least enough
food to meet the appropriate calorie and nutrient levels for the ages/
grades of the children in the school (see paragraphs (c), (d), (i)(1) or
(l) of this section, depending on the menu planning approach used).
Also, if schools use one of the food-based menu planning approaches,
they must plan and produce at least enough food to offer each child the
minimum quantities under the meal pattern (see paragraph (k) of this
section). Schools offering lunches to infants must meet the meal pattern
requirements in paragraph (o) of this section.
(ii) Requirements for afterschool snacks. Schools offering
afterschool snacks in afterschool care programs must meet the meal
pattern requirements in paragraph (n) of this section. Schools must plan
and produce enough food to offer each child the minimum quantities under
the meal pattern in paragraph (n) of this section. The component
requirements for meal supplements served under the Child and Adult Care
Food Program authorized under part 226 of this chapter also apply to
afterschool snacks served in accordance with paragraph (n) of this
section.
(2) Unit pricing. Schools must price each meal as a unit. Schools
need to consider participation trends in an effort to provide one
reimbursable lunch and, if applicable, one reimbursable afterschool
snack for each child every day. If there are leftover meals, schools may
offer them to the students but cannot get reimbursement for them.
(3) Production and menu records. Schools must keep production and
menu records for the meals they produce. These records must show how the
meals contribute to the required food components, food items or menu
items every day. In addition, for lunches, these records must show how
the lunches contribute to the nutrition standards in paragraph (b) of
this section and the appropriate calorie and nutrient levels for the
ages/grades of the children in the school (see paragraphs (c), (d), or
(i)(1) or (l) of this section, depending on the menu planning approach
used) over the school week. If applicable, schools or school food
authorities must maintain nutritional analysis records to demonstrate
that lunches meet, when averaged over each school week:
(i) The nutrition standards provided in paragraph (b) of this
section; and
(ii) The nutrient and calorie levels for children for each age or
grade group in accordance with paragraphs (c) or (i)(1) of this section
or developed under paragraph (l) of this section.
(b) What are the specific nutrition standards for lunches? Children
age 2 and above must be offered lunches that
[[Page 22]]
meet the following nutrition standards for their age/grade group:
(1) Provision of one-third of the Recommended Dietary Allowances
(RDAs) for protein, calcium, iron, vitamin A and vitamin C in the
appropriate levels for the ages/grades (see paragraphs (c), (d), (i)(1)
or (l) of this section, depending on the menu planning approach used);
(2) Provision of the lunchtime energy allowances (calories) in the
appropriate levels (see paragraphs (c), (d),(i)(1) or (l) of this
section, depending on the menu planning approach used);
(3) These applicable recommendations from the 1995 Dietary
Guidelines for Americans:
(i) Eat a variety of foods;
(ii) Limit total fat to 30 percent of total calories;
(iii) Limit saturated fat to less than 10 percent of total calories;
(iv) Choose a diet low in cholesterol;
(v) Choose a diet with plenty of grain products, vegetables, and
fruits; and
(vi) Choose a diet moderate in salt and sodium.
(4) These measures of compliance with the applicable recommendations
of the 1995 Dietary Guidelines for Americans:
(i) Limit the percent of calories from total fat to 30 percent of
the actual number of calories offered;
(ii) Limit the percent of calories from saturated fat to less than
10 percent of the actual number of calories offered;
(iii) Reduce sodium and cholesterol levels; and
(iv) Increase the level of dietary fiber.
(5) School food authorities have several ways to plan menus. The
minimum levels of nutrients and calories that lunches must offer depends
on the menu planning approach used and the ages/grades served. The menu
planning approaches are:
(i) Nutrient standard menu planning (see paragraphs (c) and (i) of
this section);
(ii) Assisted nutrient standard menu planning (see paragraphs (c)
and (j) of this section);
(iii) Traditional food-based menu planning (see paragraphs (d)(1)
and (k) of this section);
(iv) Enhanced food-based menu planning (see paragraphs (d)(2) and
(k) of this section); or
(v) Alternate menu planning (see paragraph (l) of this section).
(c) What are the levels for nutrients and calories for lunches
planned under the nutrient standard or assisted nutrient standard menu
planning approaches?--(1) Required levels. The required levels are:
[GRAPHIC] [TIFF OMITTED] TR09MY00.000
(2) Optional levels. Optional levels are:
[[Page 23]]
[GRAPHIC] [TIFF OMITTED] TR09MY00.001
(3) Customized levels. Schools may also develop a set of nutrient
and calorie levels for a school week. These levels are customized for
the age groups of the children in the particular school or school food
authority.
(d) What are the nutrient and calorie levels for lunches planned
under the food-based menu planning approaches?--(1) Traditional
approach. For the traditional food-based menu planning approach, the
required levels are:
[GRAPHIC] [TIFF OMITTED] TN17MY00.000
(2) Enhanced approach. For the enhanced food-based menu planning
approach, the required levels are:
[[Page 24]]
[GRAPHIC] [TIFF OMITTED] TR09MY00.003
(e) Must schools offer choices at lunch? FNS encourages schools to
offer children a selection of foods and menu items at lunch. Choices
provide variety and encourage consumption. Schools may offer choices of
reimbursable lunches or foods within a reimbursable lunch. Children who
are eligible for free or reduced price lunches must be allowed to take
any reimbursable lunch or any choices offered as part of a reimbursable
lunch. Schools may establish different unit prices for each lunch
offered provided that the benefits made available to children eligible
for free or reduced price lunches are not affected.
(f) What are the requirements for lunch periods?--(1) Timing.
Schools must offer lunches meeting the requirements of this section
during the period the school has designated as the lunch period. Schools
must offer lunches between 10:00 a.m. and 2:00 p.m. Schools may request
an exemption from these times only from FNS.
(2) Lunch periods for young children. With State agency approval,
schools are encouraged to serve children ages one through five over two
service periods. Schools may divide the quantities and/or the menu
items, foods, or food items offered each time any way they wish.
(3) Adequate lunch periods. FNS encourages schools to provide
sufficient lunch periods that are long enough to give all students
enough time to be served and to eat their lunches.
(g) What exceptions and variations are allowed in meals?--(1)
Exceptions for medical or special dietary needs. Schools must make
substitutions in lunches and afterschool snacks for students who are
considered to have a disability under 7 CFR part 15b and whose
disability restricts their diet. Schools may also make substitutions for
students who do not have a disability but who cannot consume the regular
lunch or afterschool snack because of medical or other special dietary
needs. Substitutions must be made on a case by case basis only when
supported by a statement of the need for substitutions that includes
recommended alternate foods, unless otherwise exempted by FNS. Such
statement must, in the case of a student with a disability, be signed by
a physician or, in the case of a student who is not disabled, by a
recognized medical authority.
(2) Variations for ethnic, religious, or economic reasons. Schools
should consider ethnic and religious preferences when planning and
preparing meals. Variations on an experimental or continuing basis in
the food components for the food-based menu planning approaches in
paragraphs (k) or (n) of this section may be allowed by FNS. Any
variations must be nutritionally sound and needed to meet ethnic,
religious, or economic needs.
[[Page 25]]
(3) Exceptions for natural disasters. If there is a natural disaster
or other catastrophe, FNS may temporarily allow schools to serve meals
for reimbursement that do not meet the requirements in this section.
(h) What must schools do about nutrition disclosure? To the extent
that school food authorities identify foods in a menu, or on the serving
line or through other available means of communicating with program
participants, school food authorities must identify products or dishes
containing more than 30 parts fully hydrated alternate protein products
(as specified in appendix A of this part) to less than 70 parts beef,
pork, poultry or seafood on an uncooked basis, in a manner which does
not characterize the product or dish solely as beef, pork, poultry or
seafood. Additionally, FNS encourages schools to inform the students,
parents, and the public about efforts they are making to meet the
nutrition standards (see paragraph (b) of this section) for school
lunches.
(i) What are the requirements for lunches under the nutrient
standard menu planning approach?--(1) Nutrient levels--(i) Adjusting
nutrient levels for young children. Schools with children who are age 2
must at least meet the nutrition standards in paragraph (b) of this
section and the preschool nutrient and calorie levels in paragraph
(c)(1) of this section over a school week. Schools may also use the
preschool nutrient and calorie levels in paragraph (c)(2) of this
section or may calculate nutrient and calorie levels for two year olds.
FNS has a method for calculating these levels in guidance materials for
menu planning.
(ii) Minimum levels for nutrients. Lunches must at least offer the
nutrient and calorie levels for the required grade groups in the table
in paragraph (c)(1) of this section. Schools may also offer lunches
meeting the nutrient and calorie levels for the age groups in paragraph
(c)(2) of this section. If only one grade or age group is outside either
of these established levels, schools may follow the levels for the
majority of the children. Schools may also customize the nutrient and
calorie levels for the children they serve. FNS has a method for
calculating these levels in guidance materials for menu planning.
(2) Reimbursable lunches--(i) Contents of a reimbursable lunch. A
reimbursable lunch must include at least three menu items. One of those
menu items must be an entree, and one must be fluid milk as a beverage.
An entree is a combination of foods or is a single food item offered as
the main course. All menu items or foods offered in a reimbursable lunch
contribute to the nutrition standards in paragraph (b) of this section
and to the levels of nutrients and calories that must be met in
paragraphs (c) or (i)(1) of this section. Unless offered as part of a
menu item in a reimbursable lunch, foods of minimal nutritional value
(see appendix B to part 210) are not included in the nutrient analysis.
Reimbursable lunches planned under the nutrient standard menu planning
approach must meet the nutrition standards in paragraph (b) of this
section and the appropriate nutrient and calorie levels in either
paragraph (c) or paragraph (i)(1) of this section.
(ii) Offer versus serve. Schools must offer at least three menu
items for lunches. Senior high (as defined by the State educational
agency) school students must select at least two menu items and are
allowed to decline a maximum of two menu items. The student must always
take the entree. The price of a reimbursable lunch does not change if
the student does not take a menu item or requests smaller portions. At
the discretion of the school food authority, students below the senior
high level may also participate in offer versus serve.
(3) Doing the analysis. Schools using nutrient standard menu
planning must conduct the analysis on all menu items and foods offered
in a reimbursable lunch. The analysis is conducted over a school week.
Unless offered as part of a menu item in a reimbursable lunch, foods of
minimal nutritional value (see appendix B to part 210) are not included
in the nutrient analysis.
(4) Software elements--(i) The Child Nutrition Database. The
nutrient analysis is based on the Child Nutrition Database. This
database is part of the software used to do a nutrient analysis.
[[Page 26]]
Software companies or others developing systems for schools may contact
FNS for more information about the database.
(ii) Software evaluation. FNS or an FNS designee evaluates any
nutrient analysis software before it may be used in schools. FNS or its
designee determines if the software, as submitted, meets the minimum
requirements. The approval of software does not mean that FNS or USDA
endorses it. The software must be able to do all functions after the
basic data is entered. The required functions include weighted averages
and the optional combined analysis of the lunch and breakfast programs.
(5) Nutrient analysis procedures--(i) Weighted averages. Schools
must include all menu items and foods offered in reimbursable lunches in
the nutrient analysis. Menu items and foods are included based on the
portion sizes and projected serving amounts. They are also weighted
based on their proportionate contribution to the lunches offered. This
means that menu items or foods more frequently offered are weighted more
heavily than those not offered as frequently. Schools calculate
weighting as indicated by FNS guidance and by the guidance provided by
the software. Through September 30, 2009, schools are not required to
conduct a weighted analysis.
(ii) Analyzed nutrients. The analysis includes all menu items and
foods offered over a school week. The analysis must determine the levels
of: Calories, protein, vitamin A, vitamin C, iron, calcium, total fat,
saturated fat, sodium, cholesterol and dietary fiber.
(iii) Combining the analysis of the lunch and breakfast programs. At
their option, schools may combine the analysis of lunches offered under
this part and breakfasts offered under part 220 of this Chapter. The
analysis is done proportionately to the levels of participation in each
program based on FNS guidance.
(6) Comparing the results of the nutrient analysis. Once the
procedures in paragraph (i)(5) of this section are completed, schools
must compare the results of the analysis to the appropriate nutrient and
calorie levels, by age/grade groups, in paragraph (c) of this section or
those developed under paragraph (i)(1) of this section. This comparison
determines the school week's average. Schools must also make comparisons
to the nutrition standards in paragraph (b) of this section to determine
how well they are meeting the nutrition standards over the school week.
(7) Adjustments to the menus. Once schools know the results of the
nutrient analysis based on the procedures in paragraphs (i)(5) and
(i)(6) of this section, they must adjust future menu cycles to reflect
production and how often the menu items and foods are offered. Schools
may need to reanalyze menus when the students' selections change and,
consequently, production levels change. Schools may need to change the
menu items and foods offered given the students' selections and may need
to modify the recipes and other specifications to make sure that the
nutrition standards in paragraph (b) and either paragraphs (c) or (i)(1)
of this section are met.
(8) Standardized recipes. If a school follows the nutrient standard
menu planning approach, it must develop and follow standardized recipes.
A standardized recipe is a recipe that was tested to provide an
established yield and quantity using the same ingredients for both
measurement and preparation methods. Any standardized recipes developed
by USDA/FNS are in the Child Nutrition Database. If a school has its own
recipes, they must be standardized and analyzed to determine the levels
of calories, nutrients, and dietary components listed in paragraph
(i)(5)(ii) of this section. Schools must add any local recipes to their
local database as outlined in FNS guidance.
(9) Processed foods. The Child Nutrition Database includes a number
of processed foods. Schools may use purchased processed foods and menu
items that are not in the Child Nutrition Database. Schools or the State
agency must add any locally purchased processed foods and menu items to
their local database as outlined in FNS guidance. Schools or the State
agency must obtain the levels of calories, nutrients, and dietary
components listed in paragraph (i)(5)(ii) of this section.
[[Page 27]]
(10) Menu substitutions. Schools may need to substitute foods or
menu items in a menu that was already analyzed. If the substitution(s)
occurs more than two weeks before the planned menu is served, the school
must reanalyze the revised menu. If the substitution(s) occurs two weeks
or less before the planned menu is served, the school does not need to
do a reanalysis. However, schools should always try to substitute
similar foods.
(11) Meeting the nutrition standards. The school's analysis shows
whether their menus are meeting the nutrition standards in paragraph (b)
of this section and the appropriate levels of nutrients and calories in
paragraph (c) of this section or customized levels developed under
paragraph (i)(1) of this section. If the analysis shows that the menu(s)
are not meeting these standards, the school needs to take action to make
sure that the lunches meet the nutrition standards and the calorie,
nutrient, and dietary component levels. Actions may include technical
assistance and training and may be taken by the State agency, the school
food authority or by the school as needed.
(12) Other Child Nutrition Programs and nutrient standard menu
planning. School food authorities that operate the Summer Food Service
Program (part 225 of this chapter) and/or the Child and Adult Care Food
Program (part 226 of this chapter) may, with State agency approval,
prepare lunches for these programs using the nutrient standard menu
planning approach for children age two and over. FNS has guidance on the
levels of nutrients and calories for adult lunches under the Child and
Adult Care Food Program. However, afterschool snacks continue to use the
appropriate program's meal pattern.
(j) What are the requirements for lunches under the assisted
nutrient standard menu planning approach?--(1) Definition of assisted
nutrient standard menu planning. Some school food authorities may not be
able to do all of the procedures necessary for nutrient standard menu
planning. The assisted nutrient standard menu planning approach provides
schools with menu cycles developed and analyzed by other sources. These
sources include the State agency, other school food authorities,
consultants, or food service management companies.
(2) Elements of assisted nutrient standard menu planning. School
food authorities using menu cycles developed under assisted nutrient
standard menu planning must follow the procedures in paragraphs (i)(1)
through (i)(10) of this section. The menu cycles must also incorporate
local food preferences and accommodate local food service operations.
The menus cycles must meet the nutrition standards in paragraph (b) of
this section and meet the nutrient and calorie levels for nutrient
standard menu planning in paragraph (c) or paragraph (i)(1) of this
section. The supplier of the assisted nutrient standard menu planning
approach must also develop and provide recipes, food product
specifications, and preparation techniques. All of these components
support the nutrient analysis results of the menus cycles used by the
receiving school food authorities.
(3) State agency approval. Prior to its use, the State agency must
approve the initial menu cycle, recipes and other specifications of the
assisted nutrient standard menu planning approach. The State agency
needs to ensure that all the steps required for nutrient analysis were
followed. School food authorities may also ask the State agency for
assistance with implementation of their assisted nutrient standard menu
planning approach.
(4) Required adjustments. After the initial service of the menu
cycle developed under the assisted nutrient standard menu planning
approach, the nutrient analysis must be reassessed and appropriate
adjustments made as discussed in paragraph (i)(7) of this section.
(5) Final responsibility for meeting the nutrition standards. The
school food authority using the assisted nutrient standard menu planning
approach retains responsibility for meeting the nutrition standards in
paragraph (b) of this section and the calorie and nutrient levels in
paragraph (c) or paragraph (i)(1) of this section.
(6) Adjustments to the menus. If the nutrient analysis shows that
the lunches offered are not meeting the nutrition
[[Page 28]]
standards in paragraph (b) of this section and the calorie and nutrient
levels in paragraph (c) or paragraph (i)(1) of this section, the State
agency, school food authority or school must take action to make sure
the lunches offered meet these requirements. Actions needed include
technical assistance and training.
(7) Other Child Nutrition Programs and assisted nutrient standard
menu planning. School food authorities that operate the Summer Food
Service Program (part 225 of this chapter) and/or the Child and Adult
Care Food Program (part 226 of this chapter) may, with State agency
approval, prepare lunches for these programs using the assisted nutrient
standard menu planning approach for children age two and over. FNS has
guidance on the levels of nutrients and calories for adult lunches under
the Child and Adult Care Food Program. However, afterschool snacks
continue to use the appropriate program's meal pattern.
(k) What are the requirements for lunches under the food-based menu
planning approaches? There are two menu planning approaches based on
meal patterns, not nutrient analysis. These approaches are the
traditional food-based menu planning approach and the enhanced food-
based menu planning approach. Schools using one of these approaches
offer food components in at least the minimum quantities required for
the various grade groups.
(1) Quantities for the traditional food-based menu planning
approach--(i) Minimum quantities. At a minimum, schools must offer five
food items in the quantities in the following table:
[GRAPHIC] [TIFF OMITTED] TR09MY00.004
(ii) Use of Group IV quantities. Schools that are able to provide
quantities of food to children solely on the basis of their ages or
grade level should do so.
[[Page 29]]
Schools that cannot serve children on the basis of age or grade level
must provide all school age children Group IV portions as specified in
the table in paragraph (k)(1)(i) of this section. Schools serving
children on the basis of age or grade level must plan and produce
sufficient quantities of food to provide Groups I-IV no less than the
amounts specified for those children in the table in paragraph (k)(1)(i)
of this section, and sufficient quantities of food to provide Group V no
less than the specified amounts for Group IV. FNS recommends that
schools plan and produce sufficient quantities of food to provide Group
V children the larger amounts specified in the table in paragraph
(k)(1)(i) of this section. Schools that provide increased portion sizes
for Group V may comply with children's requests for smaller portion
sizes of the food items; however, schools must plan and produce
sufficient quantities of food to at least provide the serving sizes
required for Group IV. Schools must ensure that lunches are served with
the objective of providing the per lunch minimums for each age and grade
level as specified in the table in paragraph (k)(1)(i) of this section.
(2) Quantities for the enhanced food-based menu planning approach.
Schools must at least offer five food items in the quantities in the
following table:
[GRAPHIC] [TIFF OMITTED] TR09MY00.005
(3) Requirements for the meat/meat alternate component. The quantity
of the meat/meat alternate component must be the edible portion as
served. If the portion size of a food item for this component is
excessive, the school must reduce that portion and supplement it with
another meat/meat alternate to meet the full requirement. This component
must be served in a main dish or in a main dish and only one other food
item. Schools without daily choices in
[[Page 30]]
this component should not serve any one meat alternate or form of meat
(for example, ground, diced, pieces) more than three times in the same
week.
(i) Enriched macaroni. Enriched macaroni with fortified protein as
defined in appendix A to this part may be used to meet part of the meat/
meat alternate requirement when used as specified in appendix A to this
part. An enriched macaroni product with fortified protein as defined in
appendix A to this part may be used to meet part of the meat/meat
alternate component or the grains/breads component but not as both food
components in the same lunch.
(ii) Nuts and seeds. Nuts and seeds and their butters are allowed as
meat alternates in accordance with program guidance. Acorns, chestnuts,
and coconuts must not be used because of their low protein and iron
content. Nut and seed meals or flours may be used only as allowed under
appendix A to this part. Nuts or seeds may be used to meet no more than
one-half of the meat/meat alternate component with another meat/meat
alternate to meet the full requirement.
(iii) Yogurt. Yogurt may be used to meet all or part of the meat/
meat alternate requirement. Yogurt may be either plain or flavored,
unsweetened or sweetened. Noncommercial and/or nonstandardized yogurt
products, such as frozen yogurt, homemade yogurt, yogurt flavored
products, yogurt bars, yogurt covered fruit and/or nuts or similar
products are not creditable. Four ounces (weight) or \1/2\ cup (volume)
of yogurt equals one ounce of the meat/meat alternate requirement.
(4) Requirements for the vegetable/fruit component.
(i) General. Full strength vegetable or fruit juice may be used to
meet no more than one-half of the vegetable/fruit requirement. Cooked
dry beans or peas may be counted as either a vegetable or as a meat
alternate but not as both in the same meal.
(ii) Minimum quantities for the enhanced food-based menu planning.
Under the enhanced food-based menu planning approach, children in
kindergarten through grade six are offered vegetables/fruits in minimum
daily servings plus an additional one-half cup in any combination over a
five day period.
(5) Requirements for the grains/breads component--(i) Enriched or
whole grains. All grains/breads must be enriched or whole grain or made
with enriched or whole grain meal or flour.
(ii) Daily and weekly servings. The requirement for the grain/bread
component is based on minimum daily servings plus total servings over a
five day period. Schools serving lunch 6 or 7 days per week should
increase the weekly quantity by approximately 20 percent (\1/5\th) for
each additional day. When schools operate less than 5 days per week,
they may decrease the weekly quantity by approximately 20 percent (\1/
5\th) for each day less than five. The servings for biscuits, rolls,
muffins, and other grain/bread varieties are specified in the Food
Buying Guide for Child Nutrition Programs (PA 1331), an FNS publication.
(iii) Minimums under the traditional food-based menu planning
approach. Schools must offer at least one-half serving of the grain/
bread component to children in Group I and at least one serving to
children in Groups II-V daily. Schools which serve lunch at least 5 days
a week shall serve a total of at least five servings of grains/breads to
children in Group I and eight servings per week to children in Groups
II-V.
(iv) Desserts under the enhanced food-based menu planning approach.
Under the enhanced food-based menu planning approach, schools may count
up to one grain-based dessert per day for children in grades K-12
towards meeting the grains/breads component.
(6) Offer versus serve. Schools must offer all five required food
items. Senior high (as defined by the State educational agency) school
students may decline up to two of the five food items. At the school
food authority's option, students below senior high may decline one or
two of the five food items. The price of a reimbursable lunch does not
change if the student does not take a menu item or requests smaller
portions.
(7) Meal pattern exceptions for outlying areas. Schools in American
Samoa, Puerto Rico and the Virgin Islands may serve a starchy vegetable
such as
[[Page 31]]
yams, plantains, or sweet potatoes to meet the grain/bread requirement.
(l) What are the requirements for lunches planned using an alternate
menu planning approach?--(1) Definition. Alternate menu planning
approaches are those adopted or developed by school food authorities or
State agencies that differ from the standard approaches established in
paragraphs (i) through (k) of this section. There are two types of
alternate approaches. First, there are specific modifications provided
in paragraph (l)(2) of this section. Second, there are major changes to
the standard menu planning approaches or new menu planning approaches
developed by school food authorities or State agencies (see paragraph
(l)(3) of this section).
(2) Use of modifications. There are three modifications available to
schools using one of the food-based menu planning approaches for
lunches. State agencies may or may not require prior approval or may
establish guidelines for using these modifications.
(i) Modification to the meat/meat alternate component. The required
minimum quantities of the meat/meat alternate component in the food-
based menu planning approaches may be offered as a weekly total with a
one ounce (or its equivalent for certain meat alternates) minimum daily
serving size. This modification does not apply if the minimum serving of
meat/meat alternate is less than one ounce.
(ii) Modification to age/grade groups under the traditional food-
based menu planning approach. Schools using the traditional food-based
menu planning approach may:
(A) For children in grades K-6, use the portion sizes in Group IV in
the table in paragraph (k)(1) of this section and follow the nutrient
levels for children in grades K-6 in paragraphs (c)(1) and (d)(2) of
this section; and/or
(B) For children in grades 7-12, use the portion sizes in Group IV
in the table in paragraph (k)(1) of this section and follow the nutrient
levels for children in grades 7-12 in paragraphs (c)(1) and (d)(2) of
this section.
(iii) Modification for the majority of children. Under the
traditional or enhanced food-based menu planning approaches, if only one
age or grade is outside the established levels, schools may follow the
levels for the majority of children for both quantities (see paragraph
(k)) and the nutrition standards in paragraphs (b) and (d) of this
section.
(3) Use and approval of major changes or new alternate approaches.
Within the guidelines established for developing alternate menu planning
approaches, school food authorities or State agencies may modify one of
the established menu planning approaches in paragraphs (i) through (k)
of this section or may develop their own menu planning approach. The
alternate menu planning approach must be available in writing for review
and monitoring purposes. No formal plan is required; guidance material,
a handbook or protocol is sufficient. As appropriate, the material must
address how the guidelines in paragraph (l)(4) of this section are met.
A State agency that develops an alternate approach that is exempt from
FNS approval under paragraph (l)(3)(iii) of this section must notify FNS
in writing when implementing the alternate approach.
(i) Approval of local level approaches. Any school food authority-
developed menu planning approach must have prior State agency review and
approval.
(ii) Approval of State agency approaches. Unless exempt under
paragraph (l)(3)(iii) of this section, any State agency-developed menu
planning approach must have prior FNS approval.
(iii) State agency approaches not subject to approval. A State
agency-developed menu planning approach does not need FNS approval if:
(A) Five or more school food authorities in the State use it; and
(B) The State agency maintains on-going oversight of the operation
and evaluation of the approach and makes any needed adjustments to its
policies and procedures to ensure that the appropriate guidelines of
paragraph (l)(4) of this section are met.
(4) Elements for major changes or new approaches. Any alternate menu
planning approach must:
(i) Offer fluid milk, as provided in paragraph (m) of this section;
[[Page 32]]
(ii) Include offer versus serve for senior high students. Alternate
menu planning approaches should follow the offer versus serve procedures
in paragraphs (i)(2)(ii) and (k)(6) of this section, as appropriate. If
these requirements are not followed, the plan must indicate:
(A) The affected age/grade groups;
(B) The number and type of items (and, if applicable, the quantities
for the items) that constitute a reimbursable lunch under offer versus
serve;
(C) How such procedures will reduce plate waste; and
(D) How a reasonable level of calories and nutrients for the lunch
as taken is provided;
(iii) Meet the Recommended Dietary Allowances and lunchtime energy
allowances (nutrient levels) and indicate the age/grade groups served
and how the nutrient levels are met for those age/grade groups;
(iv) Follow the requirements for competitive foods in Sec. 210.11
and appendix B to this part;
(v) Follow the requirements for counting food items and products
towards the meal patterns. These requirements are found in paragraphs
(k)(3) through (k)(5) and paragraph (m) of this section, in appendices A
through C to this part, and in instructions and guidance issued by FNS.
This only applies if the alternate approach is a food-based menu
planning approach;
(vi) Identify a reimbursable lunch at the point of service;
(A) To the extent possible, the procedures provided in paragraph
(i)(2)(i) of this section for the nutrient standard or assisted nutrient
standard menu planning approaches or for food-based menu planning
approaches provided in paragraph (k) of this section must be followed.
Any instructions or guidance issued by FNS that further defines the
elements of a reimbursable lunch must be followed when using the
existing regulatory provisions.
(B) Any alternate approach that deviates from the provisions in
paragraph (i)(2)(i) or paragraph (k) of this section must indicate what
constitutes a reimbursable lunch, including the number and type of items
(and, if applicable, the quantities for the items) which comprise the
lunch, and how a reimbursable lunch is to be identified at the point of
service;
(vii) Explain how the alternate menu planning approach can be
monitored under the applicable provisions of Sec. 210.18 and Sec.
210.19, including a description of the records that will be maintained
to document compliance with the program's administrative and nutrition
requirements. However, if the procedures under Sec. 210.19 cannot be
used to monitor the alternate approach, a description of procedures
which will enable the State agency to assess compliance with the
nutrition standards in paragraphs (b)(1) through (b)(4) of this section
must be included; and
(viii) Follow the requirements for weighted analysis and for
approved software for nutrient standard menu planning approaches as
required by paragraphs (i)(4) and (i)(5) of this section unless a State
agency-developed approach meets the criteria in paragraph (l)(3)(iii) of
this section. Through September 30, 2009, schools are not required to
conduct a weighted analysis.
(m) What are the requirements for offering milk?--(1) Types of milk.
(i) Under all menu planning approaches for students, schools must
offer students fluid milk in a variety of fat contents. Schools may
offer flavored or unflavored milk and lactose-free fluid milk.
(ii) All milk served in the Program must be pasteurized fluid milk
which meets State and local standards for such milk. However, infants
under 1 year of age must be served breast milk or iron-fortified infant
formula. All milk must have vitamins A and D at levels specified by the
Food and Drug Administration and must be consistent with State and local
standards for such milk.
(2) Inadequate milk supply. If a school cannot get a supply of milk,
it can still participate in the Program under the following conditions:
(i) If emergency conditions temporarily prevent a school that
normally has a supply of fluid milk from obtaining delivery of such
milk, the State agency may allow the school to serve meals during the
emergency period with an alternate form of milk or without milk.
[[Page 33]]
(ii) If a school is unable to obtain a supply of any type of fluid
milk on a continuing basis, the State agency may approve the service of
meals without fluid milk if the school uses an equivalent amount of
canned milk or dry milk in the preparation of the meals. In Alaska,
Hawaii, American Samoa, Guam, Puerto Rico, and the Virgin Islands, if a
sufficient supply of fluid milk cannot be obtained, ``milk'' includes
reconstituted or recombined milk, or as otherwise allowed by FNS through
a written exception.
(3) Restrictions on the sale of milk. A school participating in the
Program, or a person approved by a school participating in the Program,
must not directly or indirectly restrict the sale or marketing of fluid
milk (as described in paragraph(m)(1)(ii) of this section) at any time
or in any place on school premises or at any school-sponsored event.
(n) Supplemental food. Eligible schools operating afterschool care
programs may be reimbursed for one meal supplement served to an eligible
child (as defined in Sec. 210.2) per day.
(1) Eligible schools mean schools that:
(i) Operate school lunch programs under the National School Lunch
Act;
(ii) Sponsor afterschool care programs as defined in Sec. 210.2;
and
(iii) Were participating in the Child and Adult Care Food Program as
of May 15, 1989.
(2) Meal supplements shall contain two different components from the
following four:
(i) A serving of fluid milk as a beverage, or on cereal, or used in
part for each purpose;
(ii) A serving of meat or meat alternate. Nuts and seeds and their
butters listed in program guidance are nutritionally comparable to meat
or other meat alternates based on available nutritional data. Acorns,
chestnuts, and coconuts are excluded and shall not be used as meat
alternates due to their low protein content. Nut or seed meals or flours
shall not be used as a meat alternate except as defined under appendix
A: Alternate Foods for Meals of this part;
(iii) A serving of vegetable(s) or fruit(s) or full-strength
vegetable or fruit juice, or an equivalent quantity of any combination
of these foods. Juice may not be served when milk is served as the only
other component;
(iv) A serving of whole-grain or enriched bread; or an equivalent
serving of cornbread, biscuits, rolls, muffins, etc., made with whole-
grain or enriched meal or flour; or a serving of cooked whole-grain or
enriched pasta or noodle products such as macaroni, or cereal grains
such as rice, bulgur, or corn grits; or an equivalent quantity of any
combination of these foods.
(3) Snacks served to infants ages birth through 11 months must meet
the requirements described in paragraph (n)(3)(iv) of this section.
Foods included in the snack must be of a texture and a consistency that
are appropriate for the age of the infant being served. The foods must
be served during a span of time consistent with the infant's eating
habits. For those infants whose dietary needs are more individualized,
exceptions to the meal pattern must be made in accordance with the
requirements found in paragraph (g)(1) of this section.
(i) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Snacks containing breastmilk and snacks
containing iron-fortified infant formula supplied by the school are
eligible for reimbursement. However, infant formula provided by a parent
(or guardian) and breastmilk fed directly by the infant's mother, during
a visit to the school, contribute to a reimbursable snack only when the
school supplies at least one component of the infant's snack.
(ii) Fruit juice. Juice should not be offered to infants until they
are 6 months of age and ready to drink from a cup. Feeding fruit juice
only from a cup will help develop behaviors that may prevent early
childhood caries. Fruit juice served as part of the meal pattern for
infants 8 through 11 months must be full-strength.
(iii) Solid foods. Solid foods of an appropriate texture and
consistency are required only when the infant is developmentally ready
to accept them. The school should consult with the infant's
[[Page 34]]
parent (or guardian) in making the decision to introduce solid foods.
Solid foods should be introduced one at a time, on a gradual basis, with
the intent of ensuring the infant's health and nutritional well-being.
(iv) Infant meal pattern. Infant snacks must have, at a minimum,
breastmilk or iron-fortified infant formula, or portions of both, in the
appropriate amount indicated for the infant's age. For some breastfed
infants who regularly consume less than the minimum amount of breastmilk
per feeding, a serving of less than the minimum amount of breastmilk may
be offered. In these situations, additional breastmilk must be offered
if the infant is still hungry. Some infants may be developmentally ready
to accept an additional food component. Snacks are reimbursable when
schools provide all of the components in the meal pattern that the
infant is developmentally ready to accept.
(A) Birth through 3 months. 4 to 6 fluid ounces of breastmilk or
iron-fortified infant formula--only breastmilk or iron-fortified formula
is required to meet the infant's nutritional needs.
(B) 4 through 7 months. 4 to 6 fluid ounces of breastmilk or iron-
fortified infant formula--only breastmilk or iron-fortified formula is
required to meet the infant's nutritional needs.
(C) 8 through 11 months. 2 to 4 fluid ounces of breastmilk, iron-
fortified infant formula, or full strength fruit juice; and 0 to \1/2\
slice of crusty bread (if developmentally ready) or 0 to 2 cracker type
products (if developmentally ready), which are made from whole-grain or
enriched meal or flour, and suitable as a finger food for an infant.
(4) The minimum amounts of food components to be served as meal
supplements as set forth in paragraphs (n)(2) and (n)(3) of this section
are as follows. Select two different components from the four listed.
(Juice may not be served when milk is served as the only other
component.)
Snack Pattern for Infants
------------------------------------------------------------------------
4 through through 8 through 11
Birth through 3 months 7 months months
------------------------------------------------------------------------
4-6 fluid ounces of formula \1\ 4-6 fluid ounces 2-4 fluid ounces
or breastmilk \2\ \3\. of formula \1\ or of formula \1\,
breastmilk \2\ breastmilk \2\
\3\. \3\, or fruit
juice \4\; and
0-\1/2\ slice of
bread \5\ or 0-2
crackers \5\.
------------------------------------------------------------------------
\1\ Infant formula must be iron-fortified.
\2\ Breastmilk or iron-fortified formula, or portions of both, may be
served; however, it is recommended that breastmilk be served in place
of formula from birth through 11 months.
\3\ For some breastfed infants who regularly consume less than the
minimum amount of breastmilk per feeding, a serving of less than the
minimum amount of breastmilk may be offered, with additional
breastmilk offered if the infant is still hungry.
\4\ Fruit juice must be full-strength.
\5\ A serving of this component must be made from whole-grain or
enriched meal or flour. It is required only when the infant is
developmentally ready to accept it.
Supplements for Infants
----------------------------------------------------------------------------------------------------------------
Birth through 3 months 4 through 7 months 8 through 11 months
----------------------------------------------------------------------------------------------------------------
Supplement (snack)................ 4-6 fl. oz. breast 4-6 fl. oz. breast 2-4 fl. oz breast milk 2, 3,
milk 2, 3 or formula milk 2, 3 or formula formula 1, or fruit juice
\1\ \1\ \4\;
...................... ...................... 0-\1/2\ bread \5\ or
...................... ...................... 0-2 crackers \5\.
----------------------------------------------------------------------------------------------------------------
\1\ Infant formula shall be iron-fortified.
\2\ It is recommended that breast milk be served in place of formula from birth through 11 months.
\3\ For some breastfed infants who regularly consume less than the minimum amount of breast milk per feeding, a
serving of less than the minimum amount of breast milk may be offered with additional breast milk offered if
the infant is still hungry.
\4\ Fruit juice shall be full-strength.
\5\ Bread and bread alternates shall be made from whole-grain or enriched meal or flour. A serving of this
component shall be optional.
(o) What are the requirements for the infant lunch pattern?--(1)
Definitions. (i) Infant cereal means any iron-fortified dry cereal
especially formulated and generally recognized as cereal for infants
which is routinely mixed with breast milk or iron-fortified infant
formula prior to consumption.
(ii) Infant formula means any iron-fortified formula intended for
dietary use solely as a food for normal, healthy infants. Formulas
specifically formulated for infants with inborn errors of metabolism or
digestive or absorptive problems are not included in this definition.
Infant formula, when served,
[[Page 35]]
must be in liquid state at recommended dilution.
(2) Feeding lunches to infants. Lunches served to infants ages birth
through 11 months must meet the requirements described in paragraph
(o)(5) of this section. Foods included in the lunch must be of a texture
and a consistency that are appropriate for the age of the infant being
served. The foods must be served during a span of time consistent with
the infant's eating habits. For those infants whose dietary needs are
more individualized, exceptions to the meal pattern must be made in
accordance with the requirements found in paragraph (g)(1) of this
section.
(3) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Meals containing breastmilk and meals containing
iron-fortified infant formula supplied by the school are eligible for
reimbursement. However, infant formula provided by a parent (or
guardian) and breastmilk fed directly by the infant's mother, during a
visit to the school, contribute to a reimbursable lunch only when the
school supplies at least one component of the infant's meal.
(4) Solid foods. For infants ages 4 through 7 months, solid foods of
an appropriate texture and consistency are required only when the infant
is developmentally ready to accept them. The school should consult with
the infant's parent (or guardian) in making the decision to introduce
solid foods. Solid foods should be introduced one at a time, on a
gradual basis, with the intent of ensuring the infant's health and
nutritional well-being.
(5) Infant meal pattern. Infant lunches must have, at a minimum,
each of the food components indicated, in the amount that is appropriate
for the infant's age. For some breastfed infants who regularly consume
less than the minimum amount of breastmilk per feeding, a serving of
less than the minimum amount of breastmilk may be offered. In these
situations, additional breastmilk must be offered if the infant is still
hungry. Lunches may include portions of breastmilk and iron-fortified
infant formula as long as the total number of ounces meets, or exceeds,
the minimum amount required of this food component. Similarly, to meet
the component requirements for vegetables and fruit, portions of both
may be served.
(i) Birth through 3 months. 4 to 6 fluid ounces of breastmilk or
iron-fortified infant formula--only breastmilk or iron-fortified formula
is required to meet the infant's nutritional needs.
(ii) 4 through 7 months. Breastmilk or iron-fortified formula is
required. Some infants may be developmentally ready for solid foods of
an appropriate texture and consistency. Lunches are reimbursable when
schools provide all of the components in the meal pattern that the
infant is developmentally ready to accept.
(A) 4 to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(B) 0 to 3 tablespoons of iron-fortified dry infant cereal; and
(C) 0 to 3 tablespoons of fruit or vegetable.
(iii) 8 through 11 months. Breastmilk or iron-fortified formula and
solid foods of an appropriate texture and consistency are required.
(A) 6 to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(B) 2 to 4 tablespoons of iron-fortified dry infant cereal; and/or 1
to 4 tablespoons of meat, fish, poultry, egg yolk, or cooked dry beans
or peas; or \1/2\ to 2 ounces (weight) of cheese; or 1 to 4 ounces
(volume) of cottage cheese; or 1 to 4 ounces (weight) of cheese food or
cheese spread; and
(C) 1 to 4 tablespoons of fruit or vegetable.
(6) Infant meal pattern table. The minimum amounts of food
components to serve to infants, as described in paragraph (o)(5) of this
section, are:
[[Page 36]]
Lunch Pattern for Infants
------------------------------------------------------------------------
8 through 11
Birth through 3 months 4 through 7 months months
------------------------------------------------------------------------
4-6 fluid ounces of formula1 or 4-8 fluid ounces of 6-8 fluid ounces
breastmilk 2 3. formula1 or of formula 1 or
breastmilk2 3; and breastmilk 2 3;
0-3 tablespoons of and
infant cereal 1 4; 2-4 tablespoons of
and. infant cereal1;
0-3 tablespoons of and/or
fruit or vegetable 1-4 tablespoons of
or both 4. meat, fish,
poultry, egg
yolk, cooked dry
beans or peas; or
\1/2\-2 ounces of
cheese; or
1-4 ounces
(volume) of
cottage cheese;
or
1-4 ounces
(weight) of
cheese food or
cheese spread;
and
1-4 tablespoons of
fruit or
vegetable or
both.
------------------------------------------------------------------------
1 Infant formula and dry infant cereal must be iron-fortified.
2 Breastmilk or formula, or portions of both, may be served; however, it
is recommended that breastmilk be served in place of formula from
birth through 11 months.
3 For some breastfed infants who regularly consume less than the minimum
amount of breastmilk per feeding, a serving of less than the minimum
amount of breastmilk may be offered, with additional breastmilk
offered if the infant is still hungry.
4 A serving of this component is required only when the infant is
developmentally ready to accept it.
[60 FR 31208, June 13, 1995, 60 FR 57146, Nov. 14, 1995, as amended at;
62 FR 10189, Mar. 6, 1997; 64 FR 61773, Nov. 15, 1999; 65 FR 26913, May
9, 2000; 65 FR 31371, May 17, 2000; 65 FR 36317, June 8, 2000; 67 FR
36783, May 28, 2002; 69 FR 70872, Dec. 8, 2004; 70 FR 70033, Nov. 21,
2005]
Sec. 210.11 Competitive food services.
(a) Definitions. For the purpose of this section:
(1) Competitive foods means any foods sold in competition with the
Program to children in food service areas during the lunch periods.
(2) Food of minimal nutritional value means: (i) In the case of
artificially sweetened foods, a food which provides less than five
percent of the Reference Daily Intakes (RDI) for each of eight specified
nutrients per serving; and (ii) in the case of all other foods, a food
which provides less than five percent of the RDI for each of eight
specified nutrients per 100 calories and less than five percent of the
RDI for each of eight specified nutrients per serving. The eight
nutrients to be assessed for this purpose are--protein, vitamin A,
vitamin C, niacin, riboflavin, thiamine, calcium, and iron. All
categories of food of minimal nutritional value and petitioning
requirements for changing the categories are listed in appendix B of
this part.
(b) General. State agencies and school food authorities shall
establish such rules or regulations as are necessary to control the sale
of foods in competition with lunches served under the Program. Such
rules or regulations shall prohibit the sale of foods of minimal
nutritional value, as listed in appendix B of this part, in the food
service areas during the lunch periods. The sale of other competitive
foods may, at the discretion of the State agency and school food
authority, be allowed in the food service area during the lunch period
only if all income from the sale of such foods accrues to the benefit of
the nonprofit school food service or the school or student organizations
approved by the school. State agencies and school food authorities may
impose additional restrictions on the sale of and income from all foods
sold at any time throughout schools participating in the Program.
[53 FR 29147, Aug. 2, 1988, as amended at 59 FR 23614, May 6, 1994]
Sec. 210.12 Student, parent and community involvement.
(a) General. School food authorities shall promote activities to
involve students and parents in the Program. Such activities may include
menu planning, enhancement of the eating environment, Program promotion,
and related student-community support activities. School food
authorities are encouraged to use the school food service program to
teach students about good nutrition practices and to involve the school
faculty and the general community in activities to enhance the Program.
[[Page 37]]
(b) Food service management companies. School food authorities
contracting with a food service management company shall comply with the
provisions of Sec. 210.16(a) regarding the establishment of an advisory
board of parents, teachers and students.
(c) Residential child care institutions. Residential child care
institutions shall comply with the provisions of this section, to the
extent possible.
Sec. 210.13 Facilities management.
(a) Health standards. The school food authority shall ensure that
food storage, preparation and service is in accordance with the
sanitation and health standards established under State and local law
and regulations.
(b) Food safety inspections. Schools shall obtain a minimum of two
food safety inspections during each school year conducted by a State or
local governmental agency responsible for food safety inspections. They
shall post in a publicly visible location a report of the most recent
inspection conducted, and provide a copy of the inspection report to a
member of the public upon request. Sites participating in more than one
child nutrition program shall only be required to obtain two food safety
inspections per school year if the nutrition programs offered use the
same facilities for the production and service of meals.
(c) Storage. The school food authority shall ensure that the
necessary facilities for storage, preparation and service of food are
maintained. Facilities for the handling, storage, and distribution of
purchased and donated foods shall be such as to properly safeguard
against theft, spoilage and other loss.
[54 FR 29147, Aug. 2, 1988, as amended at 64 FR 50740, Sept. 20, 1999;
70 FR 34630, June 15, 2005]
Sec. 210.14 Resource management.
(a) Nonprofit school food service. School food authorities shall
maintain a nonprofit school food service. Revenues received by the
nonprofit school food service are to be used only for the operation or
improvement of such food service, except that, such revenues shall not
be used to purchase land or buildings, unless otherwise approved by FNS,
or to construct buildings. Expenditures of nonprofit school food service
revenues shall be in accordance with the financial management system
established by the State agency under Sec. 210.19(a) of this part.
School food authorities may use facilities, equipment, and personnel
supported with nonprofit school food revenues to support a nonprofit
nutrition program for the elderly, including a program funded under the
Older Americans Act of 1965 (42 U.S.C. 3001 et seq.).
(b) Net cash resources. The school food authority shall limit its
net cash resources to an amount that does not exceed 3 months average
expenditures for its nonprofit school food service or such other amount
as may be approved by the State agency in accordance with Sec.
210.19(a).
(c) Financial assurances. The school food authority shall meet the
requirements of the State agency for compliance with Sec. 210.19(a)
including any separation of records of nonprofit school food service
from records of any other food service which may be operated by the
school food authority as provided in paragraph (a) of this section.
(d) Use of donated foods. The school food authority shall enter into
an agreement with the distributing agency to receive donated foods as
required by part 250 of this chapter. In addition, the school food
authority shall accept and use, in as large quantities as may be
efficiently utilized in its nonprofit school food service, such foods as
may be offered as a donation by the Department.
[53 FR 29147, Aug. 2, 1988, as amended at 60 FR 31215, June 13, 1995]
Sec. 210.15 Reporting and recordkeeping.
(a) Reporting summary. Participating school food authorities are
required to submit forms and reports to the State agency or the
distributing agency, as appropriate, to demonstrate compliance with
Program requirements. These reports include, but are not limited to:
(1) A Claim for Reimbursement and, for the month of October and as
otherwise specified by the State agency, supporting data as specified in
accordance with Sec. 210.8 of this part;
(2) An application and agreement for Program operations between the
school
[[Page 38]]
food authority and the State agency, and a Free and Reduced Price Policy
Statement as required under Sec. 210.9;
(3) A written response to reviews pertaining to corrective action
taken for Program deficiencies;
(4) A commodity school's preference whether to receive part of its
donated food allocation in cash for processing and handling of donated
foods as required under Sec. 210.19(b);
(5) A written response to audit findings pertaining to the school
food authority's operation as required under Sec. 210.22;
(6) Information on civil rights complaints, if any, and their
resolution as required under Sec. 210.23; and
(7) The number of food safety inspections obtained per school year
by each school under its jurisdiction.
(b) Recordkeeping summary. In order to participate in the Program, a
school food authority shall maintain records to demonstrate compliance
with Program requirements. These records include but are not limited to:
(1) Documentation of participation data by school in support of the
Claim for Reimbursement and data used in the claims review process, as
required under Sec. 210.8(a), (b), and (c) of this part;
(2) Production and menu records and, if appropriate, nutrition
analysis records as required under Sec. 210.10, whichever is
applicable.
(3) Participation records to demonstrate positive action toward
providing one lunch per child per day as required under Sec.
210.10(a)(2), whichever is applicable;
(4) Currently approved and denied applications for free and reduced
price lunches and a description of the verification activities,
including verified applications, and any accompanying source
documentation in accordance with 7 CFR 245.6a of this Title; and
(5) Food safety inspection records to demonstrate compliance with
Sec. 210.13(b).
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12582, Mar. 28, 1989; 56
FR 32941, July 17, 1991; 60 FR 31215, June 13, 1995; 65 FR 26912, 26922,
May 9, 2000; 70 FR 34630, June 15, 2005]
Sec. 210.16 Food service management companies.
(a) General. Any school food authority (including a State agency
acting in the capacity of a school food authority) may contract with a
food service management company to manage its food service operation in
one or more of its schools. However, no school or school food authority
may contract with a food service management company to operate an a la
carte food service unless the company agrees to offer free, reduced
price and paid reimbursable lunches to all eligible children. Any school
food authority that employs a food service management company in the
operation of its nonprofit school food service shall:
(1) Adhere to the procurement standards specified in Sec. 210.21
when contracting with the food service management company;
(2) Ensure that the food service operation is in conformance with
the school food authority's agreement under the Program;
(3) Monitor the food service operation through periodic on-site
visits;
(4) Retain control of the quality, extent, and general nature of its
food service, and the prices to be charged the children for meals;
(5) Retain signature authority on the State agency-school food
authority agreement, free and reduced price policy statement and claims;
(6) Ensure that all federally donated foods received by the school
food authority and made available to the food service management company
accrue only to the benefit of the school food authority's nonprofit
school food service and are fully utilized therein;
(7) Maintain applicable health certification and assure that all
State and local regulations are being met by a food service management
company preparing or serving meals at a school food authority facility;
and
(8) Establish an advisory board composed of parents, teachers, and
students to assist in menu planning.
(b) Invitation to bid. In addition to adhering to the procurement
standards under Sec. 210.21, school food authorities contracting with
food service management companies shall ensure that:
[[Page 39]]
(1) The invitation to bid or request for proposal contains a 21-day
cycle menu developed in accordance with the provisions of Sec. 210.10,
to be used as a standard for the purpose of basing bids or estimating
average cost per meal. If a school food authority has no capability to
prepare a cycle menu, it may, with State agency approval, request that a
21-day cycle menu developed in accordance with the provisions of Sec.
210.10, be developed and submitted by each food service management
company which intends to submit a bid or proposal to the school food
authority. The food service management company must adhere to the cycle
for the first 21 days of meal service. Changes thereafter may be made
with the approval of the school food authority.
(2) Any invitation to bid or request for proposal indicate that
nonperformance subjects the food service management company to specified
sanctions in instances where the food service management company
violates or breaches contract terms. The school food authority shall
indicate these sanctions in accordance with the procurement provisions
stated in Sec. 210.21.
(c) Contracts. Contracts that permit all income and expenses to
accrue to the food service management company and ``cost- plus- a-
percentage- of- cost'' and ``cost- plus- a- percentage- of- income''
contracts are prohibited. Contracts that provide for fixed fees such as
those that provide for management fees established on a per meal basis
are allowed. Contractual agreements with food service management
companies shall include provisions which ensure that the requirements of
this section are met. Such agreements shall also include the following:
(1) The food service management company shall maintain such records
as the school food authority will need to support its Claim for
Reimbursement under this part, and shall, at a minimum, report claim
information to the school food authority promptly at the end of each
month. Such records shall be made available to the school food
authority, upon request, and shall be retained in accordance with Sec.
210.23(c).
(2) The food service management company shall have State or local
health certification for any facility outside the school in which it
proposes to prepare meals and the food service management company shall
maintain this health certification for the duration of the contract.
(3) No payment is to be made for meals that are spoiled or
unwholesome at time of delivery, do not meet detailed specifications as
developed by the school food authority for each food component specified
in Sec. 210.10, or do not otherwise meet the requirements of the
contract. Specifications shall cover items such a grade, purchase units,
style, condition, weight, ingredients, formulations, and delivery time.
(d) Duration of contract. The contract between a school food
authority and food service management company shall be of a duration of
no longer than 1 year; and options for the yearly renewal of a contract
signed after February 16, 1988, may not exceed 4 additional years. All
contracts shall include a termination clause whereby either party may
cancel for cause with 60-day notification.
[53 FR 29147, Aug. 2, 1988, as amended at 60 FR 31215, June 13, 1995; 65
FR 26912, May 9, 2000]
Subpart D_Requirements for State Agency Participation
Sec. 210.17 Matching Federal funds.
(a) State revenue matching. For each school year, the amount of
State revenues appropriated or used specifically by the State for
program purposes shall not be less than 30 percent of the funds received
by such State under section 4 of the National School Lunch Act during
the school year beginning July 1, 1980; provided that, the State
revenues derived from the operation of such programs and State revenues
expended for salaries and administrative expenses of such programs at
the State level are not considered in this computation. However, if the
per capita income of any State is less than the per capita income of the
United States, the matching requirements so computed shall be decreased
by the percentage by which the State per capita income is below the per
capita income of the United States.
[[Page 40]]
(b) Private school exemption. No State in which the State agency is
prohibited by law from disbursing State appropriated funds to nonpublic
schools shall be required to match general cash assistance funds
expended for meals served in such schools, or to disburse to such
schools any of the State revenues required to meet the requirements of
paragraph (a) of this section. Furthermore, the requirements of this
section do not apply to schools in which the Program is administered by
a FNSRO.
(c) Territorial waiver. American Samoa and the Commonwealth of the
Northern Mariana Islands shall be exempted from the matching
requirements of paragraph (a) of this section if their respective
matching requirements are under $100,000.
(d) Applicable revenues. The following State revenues, appropriated
or used specifically for program purposes which are expended for any
school year shall be eligible for meeting the applicable percentage of
the matching requirements prescribed in paragraph (a) of this section
for that school year:
(1) State revenues disbursed by the State agency to school food
authorities for program purposes, including revenue disbursed to
nonprofit private schools where the State administers the program in
such schools;
(2) State revenues made available to school food authorities and
transferred by the school food authorities to the nonprofit school food
service accounts or otherwise expended by the school food authorities in
connection with the nonprofit school food service program; and
(3) State revenues used to finance the costs (other than State
salaries or other State level administrative costs) of the nonprofit
school food service program, i.e.:
(i) Local program supervision;
(ii) Operating the program in participating schools; and
(iii) The intrastate distribution of foods donated under part 250 of
this chapter to schools participating in the program.
(e) Distribution of matching revenues. All State revenues made
available under paragraph (a) of this section are to be disbursed to
school food authorities participating in the Program, except as provided
for under paragraph (b) of this section. Distribution of matching
revenues may be made with respect to a class of school food authorities
as well as with respect to individual school food authorities.
(f) Failure to match. If, in any school year, a State fails to meet
the State revenue matching requirement, as prescribed in paragraph (a)
of this section, the general cash assistance funds utilized by the State
during that school year shall be subject to recall by and repayment to
FNS.
(g) Reports. Within 120 days after the end of each school year, each
State agency shall submit an Annual Report of Revenues (FNS-13) to FNS.
This report identifies the State revenues to be counted toward the State
revenue matching requirements specified in paragraph (a) of this
section.
(h) Accounting system. The State agency shall establish or cause to
be established a system whereby all expended State revenues counted in
meeting the matching requirements prescribed in paragraph (a) of this
section are properly documented and accounted for.
Sec. 210.18 Administrative reviews.
(a) Implementation dates. For the school year beginning July 1,
1992, each State agency shall conduct administrative reviews as
prescribed under this section. However, FNS will approve a State
agency's written request if FNS determines that the State agency has
demonstrated good cause to delay implementation of the provisions
specified under this section to January 1, 1993. At State agency
discretion, State agencies may begin implementation of the provisions of
this section on August 16, 1991. FNS review responsibilities are
specified under Sec. 210.29 of this part.
(b) Definitions. The following definitions are provided in order to
clarify State agency administrative review requirements:
[[Page 41]]
(1) Administrative reviews means the initial comprehensive on-site
evaluation of all school food authorities participating in the Program
in accordance with the provisions of this section. The term
``administrative review'' is used to reflect a review of both critical
and general areas in accordance with paragraphs (g) and (h) of this
section, and includes other areas of Program operations determined by
the State agency to be important to Program performance.
(2) Critical areas means the following two performance standards
described in detail in paragraph (g) of this section which serve as
measures of compliance with Program regulations:
(i) Performance Standard 1--Certification/Counting/Claiming--All
free, reduced price and paid lunches claimed for reimbursement are
served only to children eligible for free, reduced price and paid
lunches, respectively; and counted, recorded, consolidated and reported
through a system which consistently yields correct claims.
(ii) Performance Standard 2--Meal Elements. Lunches claimed for
reimbursement within the school food authority contain meal elements
(food items/components, menu items or other items, as applicable) as
required under Sec. 210.10.
(3) Documented corrective action means written notification required
of the school food authority to certify that the corrective action
required for each violation has been completed and to notify the State
agency of the dates of completion. Documented corrective action may be
provided at the time of the review or may be submitted to the State
agency within specified timeframes.
(4) Follow-up reviews means any visit(s) to the school food
authority subsequent to the administrative review to ensure corrective
actions are taken.
(5) General areas means the areas of review specified in paragraph
(h) of this section.
(6) Large school food authority means, in any State:
(i) All school food authorities that participate in the Program and
have enrollments of 40,000 children or more each; or
(ii) If there are less than two school food authorities with
enrollments of 40,000 or more, the two largest school food authorities
that participate in the Program and have enrollments of 2,000 children
or more each.
(7) Participation factor means the percentages of children approved
by the school for free lunches, reduced price lunches, and paid lunches,
respectively, who are participating in the Program. The free
participation factor is derived by dividing the number of free lunches
claimed for any given period by the product of the number of children
approved for free lunches for the same period times the operating days
in that period. A similar computation is used to determine the reduced
price and paid participation factors. The number of children approved
for paid lunches is derived by subtracting the number of children
approved for free and reduced price lunches for any given period from
the total number of children enrolled in the reviewed school for the
same period of time, if available. If such enrollment figures are not
available, the most recent total number of children enrolled shall be
used. If school food authority participation factors are unavailable or
unreliable, State-wide data shall be employed.
(8) Review period means the period of time covered by the
administrative review or follow-up review. The review period is
specified in paragraph (f)(2) of this section.
(9) Review threshold means the degree of error in a critical area of
review which, if exceeded during an administrative review or follow-up
review of a school food authority, may trigger a follow-up review of
that school food authority.
(10) Small school food authority means, in any State, a school food
authority that participates in the Program and is not a large school
food authority, as defined in this section.
(c) Timing of reviews. The first year of the first 5-year review
cycle began on July 1, 1992, or as otherwise authorized under paragraph
(a) of this section and shall end on June 30, 1994. For each State
agency, the first 5-year review cycle shall end on June 30, 1998.
Administrative reviews and follow-up reviews shall be conducted as
follows:
[[Page 42]]
(1) Administrative reviews. At a minimum, State agencies shall
conduct administrative reviews of all school food authorities at least
once during each 5-year review cycle; provided that each school food
authority is reviewed at least once every 6 years. The on-site portion
of the administrative review shall be completed during the school year
in which the review was begun.
(2) Expanded review cycle. State agencies are encouraged to conduct
administrative reviews of large school food authorities and of any
school food authorities which may benefit from a more frequent interval
than the minimum 5-year cycle required in paragraph (c)(1) of this
section.
(3) Exceptions. FNS may, on an individual school food authority
basis, approve written requests for 1-year extensions to the 6-year
review interval specified in paragraph (c)(1) of this section if FNS
determines this requirement conflicts with efficient State agency
management of the Program.
(4) Follow-up reviews. The State agency is encouraged to conduct
first follow-up reviews in the same school year as the administrative
review; but in no event shall first follow-up reviews be conducted later
than December 31 of the school year following the administrative review.
Subsequent follow-up reviews shall be scheduled in accordance with
paragraph (i)(5) of this section.
(d) Scheduling school food authorities. The State agency shall use
its own criteria to schedule school food authorities for administrative
reviews; provided that the requirements of paragraph (c) of this section
are met. State agencies are encouraged to take into consideration the
findings of the claims review process required under Sec. 210.8(b)(2)
of this part in the selection of school food authorities.
(1) Schedule of reviews. To ensure no unintended overlap occurs, the
State agency shall inform FNS of the anticipated schedule of school food
authority reviews upon request.
(2) Reporting follow-up review activity. At such time as the State
agency determines that a follow-up review is needed, the State agency
shall notify FNS of the names of those large school food authorities
exceeding any one of the critical area review thresholds specified in
paragraph (i) of this section.
(3) Exceptions. In any school year in which FNS or OIG conducts a
review or investigation of a school food authority in accordance with
Sec. 210.19(a)(5) of this part, the State agency shall, unless
otherwise authorized by FNS, delay conduct of a scheduled administrative
review until the following school year. The State agency shall document
any exception authorized under this paragraph.
(e) Number of schools to review. The State agency is encouraged to
review all schools meeting the school selection criteria specified in
paragraph (e)(1) of this section. At a minimum, the State agency shall
review the number of schools specified in paragraph (e)(1) of this
section and shall select the schools to be reviewed on the basis of the
school selection criteria specified in paragraph (e)(2) of this section.
(1) Minimum number of schools. Except for residential child care
institutions, the State agency shall review all schools with a free
average daily participation of 100 or more and a free participation
factor of 100 percent or more. In no event shall the State agency review
less than the minimum number of schools illustrated in table A:
Table A
------------------------------------------------------------------------
Minimum no. of
No. of schools in the school food authority schools to be
reviewed
------------------------------------------------------------------------
1 to 5.............................................. 1
6 to 10............................................. 2
11 to 20............................................ 3
21 to 40............................................ 4
41 to 60............................................ 6
61 to 80............................................ 8
81 to 100........................................... 10
101 or more.......................................... \1\ 12
------------------------------------------------------------------------
\1\ Twelve plus 5 percent of the number of schools over 100. Fractions
shall be rounded to the nearest whole number.
(2) School selection criteria. (i) Selection of additional schools
to meet the minimum number of schools required under paragraph (e)(1) of
this section, shall be based on the following criteria:
(A) Elementary schools with a free average daily participation of
100 or more and a free participation factor of 97 percent or more;
(B) Secondary schools with a free average daily participation of 100
or more
[[Page 43]]
and a free participation factor of 77 percent or more; and
(C) Combination schools with a free average daily participation of
100 or more and a free participation factor of 87 percent or more. A
combination school means a school with a mixture of elementary and
secondary grades.
(ii) When the number of schools selected on the basis of the
criteria established in paragraph (A) through paragraph (C) of this
paragraph are not sufficient to meet the minimum number of schools
required under paragraph (e)(1) of this section, the schools selected
for review shall be selected on the basis of State agency criteria which
may include low participation schools, recommendations from a food
service director based on findings from the on-site visits or the claims
review process required under Sec. 210.8(a) of this part; or any school
in which the daily lunch counts appear questionable, e.g., identical or
very similar claiming patterns, and/or large changes in free lunch
counts.
(3) Pervasive problems. If the State agency review finds pervasive
problems in a school food authority, FNS may authorize the State agency
to cease review activities prior to reviewing the required number of
schools under paragraph (e)(1) of this section. Where FNS authorizes the
State agency to cease review activity, FNS may either conduct the review
activity itself or refer the school food authority to OIG.
(f) Scope of review. During the course of an administrative review,
each State agency shall monitor compliance with the critical and general
areas identified in paragraphs (g) and (h) of this section.
(1) Review form. State agencies shall use the administrative review
form prescribed by FNS for the critical areas of review specified in
paragraph (g) of this section. State agencies may use their own
administrative review form for the general areas of review specified in
paragraph (h) of this section.
(2) Review period. (i) The review period for administrative reviews
and follow-up reviews shall cover, at a minimum, the most recent month
for which a Claim for Reimbursement was submitted; provided that such
Claim for Reimbursement covers at least 10 operating days.
(ii) Subject to FNS approval, the State agency may conduct a review
early in the school year, prior to the submission of a Claim for
Reimbursement. In such cases, the review period shall be the prior month
of operation in the current school year, provided that such month
includes at least 10 operating days.
(3) Audit findings. To prevent duplication of effort, the State
agency may use any recent and currently applicable findings from
Federally-required audit activity or from any State-imposed audit
requirements. Such findings may be used only insofar as they pertain to
the reviewed school(s) or the overall operation of the school food
authority and they are relevant to the review period. The State agency
shall document the source and the date of the audit.
(g) Critical areas of review. The performance standards listed in
this paragraph are deemed critical since compliance in these areas is
directly linked to the service of a reimbursable lunch.
(1) Performance Standard 1 (All free, reduced price and paid lunches
claimed for reimbursement are served only to children eligible for free,
reduced price and paid lunches, respectively; and are counted, recorded,
consolidated and reported through a system which consistently yields
correct claims.) The State agency shall determine that the free and
reduced price eligibility determinations are correct. In addition, the
State agency shall determine that for each day of operation for the
review period, the number of free, reduced price and paid lunches
claimed for each reviewed school is not more than the number of lunches
served to children eligible for free, reduced price and paid lunches,
respectively, in those schools for the review period. The State agency
shall also determine that a lunch counting system is being used which
accurately counts, records, consolidates and reports the reimbursable
lunches served, by type.
(i) For each school reviewed, the State agency shall:
(A) Determine the number of children eligible for free, reduced
price and paid lunches, by type, for the review period. To make this
determination:
(1) The State agency shall:
[[Page 44]]
(i) Review all approved free and reduced price applications for
children in the reviewed schools back to the beginning of the school
year to determine whether each child's application is complete and
correctly approved in accordance with all applicable provisions of 7 CFR
part 245; or
(ii) Review all approved free and reduced price applications
effective for the review period for children in the reviewed schools; or
(iii) Review all approved free and reduced price applications
effective on the day(s) the review is conducted for children in the
reviewed schools.
(2) In lieu of reviewing all of the free and reduced price
applications as required under paragraph (g)(1)(i)(A)(1) of this
section, the State agency may review a statistically valid sample of
those applications. If the State agency chooses to review a
statistically valid sample of applications, the State agency shall
ensure that the sample size is large enough so that there is a 95
percent chance that the actual error rate for all applications is not
less than 2 percentage points less than the error rate found in the
sample (i.e., the lower bound of the one-sided 95 percent confidence
interval is no more than 2 percentage points less than the point
estimate). In addition, the State agency shall determine the need for
follow-up reviews and base fiscal action upon the error rate found in
the sample.
(3) Evaluate whether the previous year's eligibility determinations
are used after 30 operating days following the first day of school, or
as otherwise established by the State agency; provided that the State
agency-developed timeframe does not exceed the 30 operating day limit.
(4) In the case where children are determined eligible for free
lunches based on documentation from the local food stamp, Food
Distribution Program on Indian Reservations (FDPIR) or Temporary
Assistance for Needy Families (TANF) office which certifies that the
children are currently members of households receiving benefits under
the Food Stamp Program, FDPIR or TANF, determine that the certification
from the Food Stamp Program, FDPIR or TANF is official; all the
information required under Sec. 245.6 of this part is complete; and
such children were enrolled in the school under review during the review
period.
(B) Evaluate the system for issuing benefits and updating
eligibility status by validating the mechanism(s) the reviewed school
uses to provide benefits to eligible children, e.g., master list. The
State agency shall determine whether the system is adequate and, within
the timeframes established in Sec. 210.7(c)(1)(ii)(B), reflects changes
due to verification findings, transfers, reported changes in household
size or income, or from a household's decision to decline school lunch
benefits or any notification from the household that it is no longer
certified to receive food stamp, Food Distribution Program for
Households on Indian Reservations (FDPIR) or Temporary Assistance for
Needy Families (TANF) benefits.
(C) Determine whether the lunch counting system yields correct
claims. At a minimum, the State agency shall determine whether:
(1) The daily lunch counts, by type, for the review period are more
than the product of the number of children determined by the school/
school food authority to be eligible for free, reduced price, and paid
lunches for the review period times an attendance factor. If the lunch
count, for any type, appears questionable or significantly exceeds the
product of the number of eligibles, for that type, times an attendance
factor, documentation showing good cause must be available for review by
the State agency.
(2) Each type of food service line provides accurate point of
service lunch counts, by type, and those lunch counts are correctly
counted and recorded. If an alternative counting system is employed (in
accordance with Sec. 210.7(c)(2)), the State agency shall ensure that
it provides accurate counts of reimbursable lunches, by type, and is
correctly implemented as approved by the State agency.
(3) All lunches are correctly counted, recorded, consolidated and
reported for the day they are served.
(ii) For each school food authority reviewed, the State agency shall
review lunch count records to ensure that the
[[Page 45]]
lunch counts submitted by each reviewed school are correctly
consolidated, recorded, and reported by the school food authority on the
Claim for Reimbursement.
(2) Performance Standard 2 (Lunches claimed for reimbursement within
the school food authority contain meal elements (food items/components,
menu items or other items, as applicable) as required under Sec.
210.10. For each school reviewed, the State agency must:
(i) For the day of the review, observe the serving line(s) to
determine whether all required meal elements (food items/components,
menu items or other items, as applicable) as required under Sec. 210.10
are offered.
(ii) For the day of the review, observe a significant number of the
Program lunches counted at the point of service for each type of serving
line, to determine whether those lunches contain the required number of
meal elements (food items/components, menu items or other items, as
applicable) as required under Sec. 210.10.
(iii) Review menu records for the review period to determine whether
all required meal elements (food items/components, menu items or other
items, as applicable) as required under Sec. 210.10 have been offered.
(h) General areas of review. The general areas listed in this
paragraph reflect major Program requirements. The general areas of
review shall include, but are not limited to, the following areas:
(1) Free and reduced price process. In the course of the review of
each school food authority, the State agency shall:
(i) Review the implementation of the free and reduced price policy
statement to ensure it is implemented as approved.
(ii) Evaluate whether the required minimum number of applications
are verified with respect to the selection method used.
(iii) Determine that applications for verification are selected
through random or focused sampling in accordance with the provisions of
Sec. 245.6a of this title and FNS Instructions, and that no
discrimination exists in the selection process.
(iv) Establish that verification is completed by December 15. If the
administrative review occurs prior to the December 15 deadline, the
State agency shall evaluate the verification activities that have
occurred to date and assess whether these activities represent a good
faith effort that will result in compliance with the requirements of
Sec. 245.6a of this title.
(v) Confirm that the verification process is complete for each
application verified by or on behalf of the reviewed schools.
Verification is considered complete either when a child's eligibility
for the level of benefits for which he or she was approved is confirmed,
changed to a higher level of benefit, or a letter of adverse action has
been sent.
(vi) Ensure that verification records are maintained as required by
Sec. 245.6a(c) of this title.
(vii) Determine that, for each reviewed school, the lunch count
system does not overtly identify children eligible for free and reduced
price lunches.
(viii) Review a representative sample of denied applications to
evaluate whether the determining official correctly denied applicants
for free and reduced price lunches.
(2) Food quantities. For each school reviewed, the State agency must
observe a significant number of Program lunches counted at the point of
service for each type of serving line to determine whether those lunches
appear to provide meal elements (food items/components, menu items or
other items, as applicable) in the quantities required under Sec.
210.10. If visual observation suggests that quantities are insufficient,
the State agency shall require the reviewed schools to provide
documentation demonstrating that the required amounts of food were
available for service for each day of the review period.
(3) Civil rights. The State agency shall examine the school food
authority's compliance with the civil rights provisions specified in
Sec. 210.23(b) of this part.
(4) Monitoring responsibilities. The State agency shall ensure that
the school food authority conducts on-site reviews in accordance with
Sec. 210.8(a)(1) of this part and monitors claims in accordance with
Sec. 210.8(a)(2) and (a)(3) of this part.
[[Page 46]]
(5) Reporting and recordkeeping. The State agency shall determine
that the school food authority submits reports and maintains records as
required under 7 CFR parts 210 and 245.
(i) Follow-up reviews. All school food authorities found to have a
critical area violation in excess of any one of the review thresholds
specified in this paragraph are subject to follow-up reviews. State
agencies shall notify FNS of the names of large school food authorities
exceeding critical area review thresholds in accordance with paragraph
(d)(2) of this section. The State agency shall conduct a first follow-up
review of any large school food authority found on an administrative
review to have critical area violations in excess of any one of the
review thresholds. State agencies shall also conduct a first follow-up
review of at least 25 percent of the small school food authorities found
on a review to have critical area violations in excess of any one of the
review thresholds. State agencies shall conduct additional follow-up
reviews of any school food authority which has a critical area violation
exceeding a review threshold on the first follow-up or any subsequent
follow-up review regardless of whether such review is conducted by FNS
or the State agency.
(1) Selection of small school food authorities. In determining which
small school food authorities to include in the follow-up review sample,
State agencies shall select those school food authorities which have the
most serious problems, including, but not limited to, systemic
accountability problems, large overclaims, significant lunch pattern
violations, etc.
(2) Selection of schools. (i) If the critical area violation(s)
responsible for follow-up review activity are limited to school food
authority level problems (e.g. centralized application processing or
centralized kitchen), the State agency may limit the follow-up review to
the school food authority level.
(ii) If the critical area violation(s) responsible for follow-up
review activity were identified in the review of a school(s), then State
agencies shall review at least the minimum number of schools required
under paragraph (e)(1) of this section. State agencies shall meet the
minimum number of schools requirement by selecting those schools found,
on a previous review, to have significant critical area violations. If
any additional schools must be selected to meet the minimum required
number, the State agency shall select from those schools which meet
State agency-developed criteria identified under paragraph (e)(2)(ii) of
this section.
(3) Review thresholds. The review thresholds apply only to the
critical areas of review and are designed to limit follow-up reviews to
those school food authorities with serious problems. The provisions of
paragraph (i) of this section apply when:
(i) For Performance Standard 1--
(A) A number of the reviewed schools in a school food authority, as
specified in Table B, have an inadequate system for certification,
issuing benefits or updating eligibility status; or for counting,
recording, consolidating or reporting lunches, by type; or
(B) The school food authority has an inadequate system for
consolidating lunch counts, by type, or for reporting claims; or, if
applicable, for certification, issuing benefits or updating eligibility
status.
(C) At the school and school food authority level, a system for
certification, issuing benefits or updating eligibility status is
inadequate if 10 percent or more (but not less than 100 lunches) of the
free and reduced price lunches claimed for the review period (for any
school reviewed) are claimed incorrectly due to errors of certification,
benefit issuance or updating of eligibility status.
Table B
------------------------------------------------------------------------
Number of
schools
Number of schools reviewed violating
performance
standard 1
------------------------------------------------------------------------
1 to 5.................................................... 1
6 to 10................................................... 2
11 to 20.................................................. 3
21 to 30.................................................. 4
31 to 40.................................................. 5
41 to 50.................................................. 6
51 to 60.................................................. 7
61 to 70.................................................. 8
71 to 80.................................................. 9
81 to 90.................................................. 10
91 to 100................................................. 11
[[Page 47]]
101 or more............................................... 11*
------------------------------------------------------------------------
* 11 plus the number identified above for the appropriate increment.
(ii) For Performance Standard 2--10 percent or more of the total
number of Program lunches observed in a school food authority are
missing one or more of the required meal elements (food items/
components, menu items or other items, as applicable) as required under
Sec. 210.10.
(4) Scope of follow-up reviews. On any follow-up review, the State
agency is encouraged to review all of the critical and general areas of
review specified in paragraph (g) and (h) of this section for those
schools which were not reviewed during the administrative review. At a
minimum, the State agency shall:
(i) For each school selected for review (or for the school food
authority, as applicable,) review the critical areas for which the
review thresholds were exceeded by the school food authority on a
previous review;
(ii) Determine whether the school food authority has satisfactorily
completed the corrective actions in accordance with paragraph (k) of
this section required for both critical and general areas within the
timeframes established by the State agency;
(iii) Evaluate whether these corrective actions resolved the
problem(s); and
(iv) If the State agency did not evaluate the certification, count
and milk/meal service procedures for the School Breakfast Program (7 CFR
part 220) and/or the Special Milk Program for Children (7 CFR part 215)
or offering meal supplements in after hour care programs (7 CFR part
210) in those schools selected for the administrative review and
participating in those Programs, the State agency shall do so for those
schools selected for the first follow-up review.
(5) Critical area violations identified in a follow-up review.
Critical area violations identified on a follow-up review shall be
addressed as follows:
(i) If, during a follow-up review, the State agency determines, that
corrective actions have not been satisfactorily completed in accordance
with the documented corrective action, the State agency shall: require
the school food authority to resolve the problems and to submit
documented corrective action to the State agency ; take fiscal action
for critical area violations as specified in paragraph (m) of this
section; and withhold Program payments in accordance with paragraph (l)
of this section, until such time as a follow-up review, requested by the
school food authority, indicates the problem has been corrected. If the
State agency determines that the corrective actions have been completed
as specified in the documented corrective action, but those corrective
actions do not effectively resolve the problem, the State agency shall
follow the requirements for new critical area violations specified in
paragraphs (i)(5)(ii) and (iii) of this section.
(ii) If new critical area violations are observed that exceed a
review threshold, the State agency shall: Require the school food
authority to resolve the problems and to submit documented corrective
action to the State agency; take fiscal action as specified in paragraph
(m) of this section; and conduct a follow-up review within 6 operating
months of the first follow-up review.
(iii) If new critical area violations are observed which do not
exceed review thresholds, the State agency shall: Require the school
food authority to resolve the problem and to submit documented
corrective action to the State agency within specified timeframes; and
take fiscal action in accordance with paragraph (m) of this section. If
adequate documented corrective action is not received within those
timeframes, the State agency shall withhold Program payments in
accordance with paragraph (l) of this section, until such time as
adequate documented corrective action is received.
(6) General area violations identified in a follow-up review.
General area violations identified in a follow-up review shall be
addressed as follows:
[[Page 48]]
(i) If, during a follow-up review, the State agency determines that
corrective actions have not been taken in accordance with the documented
corrective action, the State agency shall withhold Program payments in
accordance with paragraph (l) of this section, until such time as the
State agency receives adequate documented corrective action.
(ii) If the State agency determines that the corrective actions
taken did not effectively resolve the problem, or if new general area
violations are observed on a follow-up review, the State agency shall
require the school food authority to resolve the problem and to submit
documented corrective action to the State agency within specified
timeframes. If adequate documented corrective action is not received
within those timeframes, the State agency shall withhold Program
payments in accordance with paragraph (l) of this section, until such
time as adequate documented corrective action is received.
(7) Exceptions. FNS may, on an individual school food authority
basis, approve written requests for exceptions to the follow-up review
requirement specified in paragraph (i)(1) of this section if FNS
determines that the requirement conflicts with efficient State agency
management of the program.
(j) Exit conference and notification. The State agency shall hold an
exit conference at the close of the administrative review and of any
subsequent follow-up review to discuss the violations observed, the
extent of the violations and a preliminary assessment of the actions
needed to correct the violations. The State agency shall discuss an
appropriate deadline(s) for completion of corrective action, provided
that the deadline(s) results in the completion of corrective action on a
timely basis. After every review, the State agency shall provide written
notification of the review findings to the school food authority's
Superintendent (or equivalent in a non-public school food authority) or
authorized representative. The written notification shall include the
review findings, the needed corrective actions, the deadlines for
completion of the corrective action, and the potential fiscal action. As
a part of the denial of all or a part of a Claim for Reimbursement or
withholding payment in accordance with the provisions of this section,
the State agency shall provide the school food authority a written
notice which details the grounds on which the denial of all or a part of
the Claim for Reimbursement or withholding payment is based. This
notice, which shall be sent by certified mail, return receipt requested,
shall also include a statement indicating that the school food authority
may appeal the denial of all or a part of a Claim for Reimbursement or
withholding payment and the entity (i.e., FNS or State agency) to which
the appeal should be directed. The State agency shall notify the school
food authority, in writing, of the appeal procedures as specified in
Sec. 210.18(q) for appeals of State agency findings, and for appeals of
FNS findings, provide a copy of Sec. 210.29(d)(3) of the regulations.
(k) Corrective action. Corrective action is required for any
violation under either the critical or general areas of the review.
Corrective action shall be applied to all schools in the school food
authority, as appropriate, to ensure that previously deficient practices
and procedures are revised system-wide.
Corrective actions may include training, technical assistance,
recalculation of data to ensure the correctness of any claim that the
school food authority is preparing at the time of the review, or other
actions. Fiscal action shall be taken in accordance with paragraph (m)
of this section.
(1) Extensions of the timeframes. If extraordinary circumstances
arise where a school food authority is unable to complete the required
corrective action within the timeframes specified by the State agency,
the State agency may extend the timeframes upon written request of the
school food authority.
(2) Documented corrective action. Documented corrective action is
required for any degree of violation of general or critical areas
identified in an administrative review or on any follow-up review.
Documented corrective action may be provided at the time of the review;
however, it shall be postmarked
[[Page 49]]
or submitted to the State agency no later than 30 days from the deadline
for completion of each required corrective action, as specified under
paragraph (j) of this section or as otherwise extended by the State
agency under paragraph (k)(1) of this section. The State agency shall
maintain any documented corrective action on file for review by FNS.
(l) Withholding payment. At a minimum, the State agency shall
withhold Program payments to a school food authority as follows:
(1) Cause. (i) The State agency shall withhold all Program payments
to a school food authority if documented corrective action for critical
area violation(s) which exceed the review threshold(s) is not provided
within the deadlines specified in paragraph (k)(2) of this section; and/
or
(ii) The State agency shall withhold all Program payments to a
school food authority if, in the event that a follow-up review is not
conducted, the State agency finds that corrective action for a critical
area violation which exceeded the review threshold was not completed
within the deadlines specified in paragraph (j) of this section or as
otherwise extended by the State agency under paragraph (k)(1) of this
section; and/or
(iii) The State agency shall withhold all Program payments to a
school food authority if, on a follow-up review, the State agency finds
a critical area violation which exceeded the review threshold on a
previous review and continues to exceed the review threshold on a
follow-up review.
(iv) The State agency may withhold payments at its discretion, if
the State agency finds that documented corrective action is not provided
within the deadlines specified in paragraph (k)(2) of this section, that
corrective action is not complete or that corrective action was not
taken as specified in the documented corrective action for a general
area violation or for a critical area violation which did not exceed the
review threshold.
(2) Duration. In all cases, Program payments shall be withheld until
such time as corrective action is completed, and documented corrective
action is received and deemed acceptable by the State agency or as
otherwise specified in paragraph (i)(5) of this section. Subsequent to
the State agency's acceptance of the corrective actions (and a follow-up
review, when required), payments will be released for all lunches served
in accordance with the provisions of this part during the period the
payments were withheld. In very serious cases, the State agency will
evaluate whether the degree of non-compliance warrants termination in
accordance with Sec. 210.25 of this part.
(3) Exceptions. The State agency may, at its discretion, reduce the
amount required to be withheld from a school food authority pursuant to
paragraph (l)(1)(i) through (iii) of this section by as much as 60
percent of the total Program payments when it is determined to be in the
best interest of the Program. FNS may authorize a State agency to limit
withholding of funds to an amount less than 40 percent of the total
Program payments, if FNS determines such action to be in the best
interest of the Program.
(4) Failure to withhold payments. FNS may suspend or withhold
Program payments, in whole or in part, to those State agencies failing
to withhold Program payments in accordance with paragraph (l)(1) of this
section and may withhold administrative funds in accordance with Sec.
235.11(b) of this title. The withholding of Program payments will remain
in effect until such time as the State agency documents compliance with
paragraph (l)(1) of this section to FNS. Subsequent to the documentation
of compliance, any withheld administrative funds will be released and
payment will be released for any lunches served in accordance with the
provisions of this part during the period the payments were withheld.
(m) Fiscal action. For purposes of the critical areas of the
administrative review and any follow-up reviews, fiscal action is
required for all violations of Performance Standards 1 and 2. Except
that, on an administrative review, the State agency may limit fiscal
action from the point corrective action occurs back through the
beginning of the review period for errors identified under paragraphs
(g)(1)(i)(A) and (g)(1)(i)(B) of this section, provided corrective
action occurs. Fiscal action shall be
[[Page 50]]
taken in accordance with the provisions identified under Sec. 210.19(c)
of this part.
(n) Miscellaneous reporting requirement. Each State agency shall
report to FNS the results of reviews by March 1 of each school year, on
a form designated by FNS. In such annual reports, the State agency shall
include the results of all administrative reviews and follow-up reviews
conducted in the preceding school year.
(o) Summary of reporting requirements. Each State agency shall
report to FNS:
(1) The names of those large school food authorities exceeding any
one of the critical area review thresholds as described in paragraph
(d)(2) of this section.
(2) The results of reviews by March 1 of each school year on a form
designated by FNS, as specified under paragraph (n) of this section.
(p) Recordkeeping. Each State agency shall keep records which
document the details of all reviews and demonstrate the degree of
compliance with the critical and general areas of review. Records shall
be retained by the State agency as specified in Sec. 210.23(c) of this
part. Such records shall include documentation of administrative reviews
and follow-up reviews. As appropriate, the records shall include
documented corrective action, and documentation of withholding of
payments and fiscal action, including recoveries made. Additionally, the
State agency must have on file:
(1) Criteria for selecting schools on first and follow-up reviews in
accordance with paragraphs (e)(2)(ii) and (i)(2)(ii) of this section.
(2) Its system for selecting small school food authorities for
follow-up reviews in accordance with paragraph (i)(1) of this section.
(3) Documentation demonstrating compliance with the statistical
sampling requirements in accordance with paragraph (g)(1)(i)(A)(1) of
this section, if applicable.
(q) School food authority appeal of State agency findings. Except
for FNS-conducted reviews authorized under Sec. 210.29(d)(2), each
State agency shall establish an appeal procedure to be followed by a
school food authority requesting a review of a denial of all or a part
of the Claim for Reimbursement or withholding payment arising from
administrative or follow-up review activity conducted by the State
agency under Sec. 210.18 of this part. State agencies may use their own
appeal procedures provided the same procedures are applied to all
appellants in the State and the procedures meet the following
requirements: appellants are assured of a fair and impartial hearing
before an independent official at which they may be represented by legal
counsel; decisions are rendered in a timely manner not to exceed 120
days from the date of the receipt of the request for review; appellants
are afforded the right to either a review of the record with the right
to file written information, or a hearing which they may attend in
person; and adequate notice is given of the time, date, place and
procedures of the hearing. If the State agency has not established its
own appeal procedures or the procedures do not meet the above listed
criteria, the State agency shall observe the following procedures at a
minimum:
(1) The written request for a review shall be postmarked within 15
calendar days of the date the appellant received the notice of the
denial of all or a part of the Claim for Reimbursement or withholding of
payment, and the State agency shall acknowledge the receipt of the
request for appeal within 10 calendar days;
(2) The appellant may refute the action specified in the notice in
person and by written documentation to the review official. In order to
be considered, written documentation must be filed with the review
official not later than 30 calendar days after the appellant received
the notice. The appellant may retain legal counsel, or may be
represented by another person. A hearing shall be held by the review
official in addition to, or in lieu of, a review of written information
submitted by the appellant only if the appellant so specifies in the
letter of request for review. Failure of the appellant school food
authority's representative to appear at a scheduled hearing shall
constitute the appellant school food authority's
[[Page 51]]
waiver of the right to a personal appearance before the review official,
unless the review official agrees to reschedule the hearing. A
representative of the State agency shall be allowed to attend the
hearing to respond to the appellant's testimony and to answer questions
posed by the review official;
(3) If the appellant has requested a hearing, the appellant and the
State agency shall be provided with at least 10 calendar days advance
written notice, sent by certified mail, return receipt requested, of the
time, date and place of the hearing;
(4) Any information on which the State agency's action was based
shall be available to the appellant for inspection from the date of
receipt of the request for review;
(5) The review official shall be an independent and impartial
official other than, and not accountable to, any person authorized to
make decisions that are subject to appeal under the provisions of this
section;
(6) The review official shall make a determination based on
information provided by the State agency and the appellant, and on
Program regulations;
(7) Within 60 calendar days of the State agency's receipt of the
request for review, by written notice, sent by certified mail, return
receipt requested, the review official shall inform the State agency and
the appellant of the determination of the review official. The final
determination shall take effect upon receipt of the written notice of
the final decision by the school food authority;
(8) The State agency's action shall remain in effect during the
appeal process;
(9) The determination by the State review official is the final
administrative determination to be afforded to the appellant.
(r) FNS review activity. The term ``State agency'' and all the
provisions specified in paragraphs (a)-(h) of this section refer to FNS
when FNS conducts administrative reviews or follow-up reviews in
accordance with Sec. 210.29(d)(2). FNS will notify the State agency of
the review findings and the need for corrective action and fiscal
action. The State agency shall pursue any needed follow-up activity.
[56 FR 32942, July 17, 1991; 56 FR 55527, Oct. 28, 1991, as amended at
57 FR 38584, Aug. 26, 1992; 57 FR 40729, Sept. 4, 1992; 59 FR 1894, Jan.
13, 1994; 60 FR 31215, June 13, 1995; 60 FR 57147, Nov. 14, 1995; 64 FR
50740, 50741, Sept. 20, 1999; 64 FR 72471, Dec. 28, 1999; 65 FR 26922,
May 9, 2000]
Sec. 210.19 Additional responsibilities.
(a) General Program management. Each State agency shall provide an
adequate number of consultative, technical and managerial personnel to
administer programs and monitor performance in complying with all
Program requirements.
(1) Compliance with nutrition standards. (i) Beginning with School
Year 1996-1997, State agencies shall evaluate compliance, over the
school week, with the nutrition standards for lunches and, as
applicable, for breakfasts. Review activity may be confined to lunches
served under the Program unless a menu planning approach is used
exclusively in the School Breakfast Program or unless the school food
authority only offers breakfasts under the School Breakfast Program. For
lunches, compliance with the requirements in Sec. 210.10(b) and Sec.
210.10(c), (d), or (i)(1) or the procedures developed under Sec.
210.10(l), as applicable, is assessed. For breakfasts, see Sec.
220.13(f)(3) of this chapter.
(A) These evaluations may be conducted at the same time a school
food authority is scheduled for an administrative review in accordance
with Sec. 210.18. State agencies may also conduct these evaluations in
conjunction with technical assistance visits, other reviews, or
separately.
(B) The type of evaluation conducted by the State agency shall be
determined by the menu planning approach chosen by the school food
authority. At a minimum, the State agency shall review at least one
school for each type of menu planning approach used in the school food
authority.
(C) In addition, State agencies are encouraged to review breakfasts
offered under the School Breakfast Program as well if the school food
authority requires technical assistance from the State agency to meet
the nutrition
[[Page 52]]
standards or if corrective action is needed. Such review shall determine
compliance with the appropriate requirements in Sec. 220.13(f)(3) of
this chapter and may be done at the time of the initial review or as
part of a follow-up to assess compliance with the nutrition standards.
(ii) At a minimum, State agencies shall conduct evaluations of
compliance with the nutrition standards in Sec. 210.10 and Sec. 220.8
of this Chapter at least once during each 5-year review cycle provided
that each school food authority is evaluated at least once every 6
years, except that the first cycle shall begin July 1, 1996, and shall
end on June 30, 2003. The compliance evaluation for the nutrition
standards shall be conducted on the menu for any week of the current
school year in which such evaluation is conducted. The week selected
must continue to represent the current menu planning approach(es).
(iii) For school food authorities choosing the nutrient standard or
assisted nutrient standard menu planning approaches provided in Sec.
210.10(i), Sec. 210.10(j), Sec. 220.8(e) or Sec. 220.8(f) of this
chapter, or developed under the procedures in Sec. 210.10(l) or Sec.
220.8(h) of this chapter, the State agency shall assess the nutrient
analysis to determine if the school food authority is properly applying
the methodology in these paragraphs, as applicable. Part of this
assessment shall be an independent review of menus and production
records to determine if they correspond to the analysis conducted by the
school food authority and if the menu, as offered, over a school week,
corresponds to the nutrition standards set forth in Sec. 210.10(b) and
the appropriate calorie and nutrient levels in Sec. 210.10(c) or Sec.
210.10(i)(1), whichever is applicable.
(iv) For school food authorities choosing the food-based menu
planning approaches provided in Sec. 210.10(k) or Sec. 220.8(g) of
this chapter or developed under the procedures in Sec. 210.10(l) or
Sec. 220.8(h) of this chapter, the State agency must determine if the
nutrition standards in Sec. 210.10 and Sec. 220.8 of this chapter are
met. The State agency shall conduct a nutrient analysis in accordance
with the procedures in Sec. 210.10(i) or Sec. 220.8(e) of this
chapter, as appropriate, except that the State agency may:
(A) Use the nutrient analysis of any school or school food authority
that offers lunches or breakfasts using the food-based menu planning
approaches provided in Sec. 210.10(k) and Sec. 220.8(g) of this
chapter and that conducts its own nutrient analysis under the criteria
for such analysis established in Sec. 210.10 and Sec. 220.8 of this
chapter for the nutrient standard and assisted nutrient standard menu
planning approaches; or
(B) Develop its own method for compliance reviews, subject to USDA
approval.
(v) If the menu for the school week fails to comply with the
nutrition standards specified in Sec. 210.10(b) and/or Sec. 220.8(a)
and the appropriate nutrient levels in either Sec. 210.10(c), Sec.
210.10(d), or Sec. 210.10(i)(1) whichever is applicable, and/or Sec.
220.8(b), Sec. 220.8(c) or Sec. 220.8(e)(1) of this chapter, whichever
is applicable, the school food authority shall develop, with the
assistance and concurrence of the State agency, a corrective action plan
designed to rectify those deficiencies. The State agency shall monitor
the school food authority's execution of the plan to ensure that the
terms of the corrective action plan are met.
(vi) For school food authorities following an alternate approach as
provided under Sec. 210.10(l) or Sec. 220.8(h) of this chapter that
does not allow for use of the monitoring procedures in paragraphs
(a)(1)(ii) or (a)(1)(iii) of this section, the State agency shall
monitor compliance following the procedures developed in accordance with
Sec. 210.10(l) or Sec. 220.8(h) of this chapter, whichever is
appropriate.
(vii) If a school food authority fails to meet the terms of the
corrective action plan, the State agency shall determine if the school
food authority is working in good faith towards compliance and, if so,
may renegotiate the corrective action plan, if warranted. However, if
the school food authority has not been acting in good faith to meet the
terms of the corrective action plan and refuses to renegotiate the plan,
the State agency shall determine if a disallowance of reimbursement
funds as authorized under paragraph (c) of this section is warranted.
[[Page 53]]
(2) Assurance of compliance for finances. Each State agency shall
ensure that school food authorities comply with the requirements to
account for all revenues and expenditures of their nonprofit school food
service. School food authorities shall meet the requirements for the
allowability of nonprofit school food service expenditures in accordance
with this part and, as applicable, 7 CFR part 3015. The State agency
shall ensure compliance with the requirements to limit net cash
resources and shall provide for approval of net cash resources in excess
of three months' average expenditures. Each State agency shall monitor,
through review or audit or by other means, the net cash resources of the
nonprofit school food service in each school food authority
participating in the Program. In the event that net cash resources
exceed 3 months' average expenditures for the school food authority's
nonprofit school food service or such other amount as may be approved in
accordance with this paragraph, the State agency may require the school
food authority to reduce the price children are charged for lunches,
improve food quality or take other action designed to improve the
nonprofit school food service. In the absence of any such action, the
State agency shall make adjustments in the rate of reimbursement under
the Program.
(3) Improved management practices. The State agency shall work with
the school food authority toward improving the school food authority's
management practices where the State agency has found poor food service
management practices leading to decreasing or low child participation
and/or poor child acceptance of the Program or of foods served. If a
substantial number of children who routinely and over a period of time
do not favorably accept a particular item that is offered; return foods;
or choose less than all food items/components or foods and menu items,
as authorized under Sec. 210.10, poor acceptance of certain menus may
be indicated.
(4) Program compliance. Each State agency shall require that school
food authorities comply with the applicable provisions of this part. The
State agency shall ensure compliance through audits, administrative
reviews, technical assistance, training guidance materials or by other
means.
(5) Investigations. Each State agency shall promptly investigate
complaints received or irregularities noted in connection with the
operation of the Program, and shall take appropriate action to correct
any irregularities. State agencies shall maintain on file, evidence of
such investigations and actions. FNS and OIG may make reviews or
investigations at the request of the State agency or where FNS or OIG
determines reviews or investigations are appropriate.
(6) Food service management companies. Each State agency shall
annually review each contract between any school food authority and food
service management company to ensure compliance with all the provisions
and standards set forth in Sec. 210.16 of this part. Each State agency
shall perform an on-site review of each school food authority
contracting with a food service management company, at least once during
each 5-year period. The State agency is encouraged to conduct such a
review when performing reviews in accordance with Sec. 210.18. Such
reviews shall include an assessment of the school food authority's
compliance with Sec. 210.16 of this part. The State agency may require
that all food service management companies that wish to contract for
food service with any school food authority in the State register with
the State agency. State agencies shall provide assistance upon request
of a school food authority to assure compliance with Program
requirements.
(b) Donated food distribution information. Information on schools
eligible to receive donated foods available under section 6 of the
National School Lunch Act (42 U.S.C. 1755) shall be prepared each year
by the State agency with accompanying information on the average daily
number of lunches to be served in such schools. This information shall
be prepared as early as practicable each school year and forwarded no
later than September 1 to the Distributing agency. The State agency
shall be responsible for promptly revising the information to reflect
additions or deletions of eligible schools, and for
[[Page 54]]
providing such adjustments in participation as are determined necessary
by the State agency. Schools shall be consulted by the Distributing
agency with respect to the needs of such schools relating to the manner
of selection and distribution of commodity assistance.
(c) Fiscal action. State agencies are responsible for ensuring
Program integrity at the school food authority level. State agencies
shall take fiscal action against school food authorities for Claims for
Reimbursement that are not properly payable under this part including,
if warranted, the disallowance of funds for failure to take corrective
action in accordance with paragraph (a)(1) of this section. In taking
fiscal action, State agencies shall use their own procedures within the
constraints of this part and shall maintain all records pertaining to
action taken under this section. The State agency may refer to FNS for
assistance in making a claims determination under this part.
(1) Definition. Fiscal action includes, but is not limited to, the
recovery of overpayment through direct assessment or offset of future
claims, disallowance of overclaims as reflected in unpaid Claims for
Reimbursement, submission of a revised Claim for Reimbursement, and
correction of records to ensure that unfiled Claims for Reimbursement
are corrected when filed. Fiscal action also includes disallowance of
funds for failure to take corrective action in accordance with paragraph
(a)(1) of this section.
(2) General principles. When taking fiscal action, State agencies
shall consider the following:
(i) The State agency shall identify the school food authority's
correct entitlement and take fiscal action when any school food
authority claims or receives more Federal funds than earned under Sec.
210.7 of this part. In order to take fiscal action, the State agency
shall identify accurate counts of reimbursable lunches through available
data, if possible. In the absence of reliable data, the State agency
shall reconstruct the lunch accounts in accordance with procedures
established by FNS. Such procedures will be based on the best available
information including, participation factors for the review period, data
from similar schools in the school food authority, etc.
(ii) Unless otherwise specified under Sec. 210.18(m) of this part,
fiscal action shall be extended back to the beginning of the school year
or that point in time during the current school year when the infraction
first occurred, as applicable. Based on the severity and longevity of
the problem, the State agency may extend fiscal action back to previous
school years, as applicable. The State agency shall ensure that any
Claim for Reimbursement, filed subsequent to the reviews conducted under
Sec. 210.18 and prior to the implementation of corrective action, is
limited to lunches eligible for reimbursement under this part.
(iii) In taking fiscal action, State agencies shall assume that
children determined by the reviewer to be incorrectly approved for free
and reduced price lunches participated at the same rate as correctly
approved children in the corresponding lunch category.
(3) Failure to collect. If a State agency fails to disallow a claim
or recover an overpayment from a school food authority, as described in
this section, FNS will notify the State agency that a claim may be
assessed against the State agency. In all such cases, the State agency
shall have full opportunity to submit evidence concerning overpayment.
If after considering all available information, FNS determines that a
claim is warranted, FNS will assess a claim in the amount of such
overpayment against the State agency. If the State agency fails to pay
any such demand for funds promptly, FNS will reduce the State agency's
Letter of Credit by the sum due in accordance with FNS' existing offset
procedures for Letter of Credit. In such event, the State agency shall
provide the funds necessary to maintain Program operations at the level
of earnings from a source other than the Program.
(4) Interest charge. If an agreement cannot be reached with the
State agency for payment of its debts or for offset of debts on its
current Letter of Credit, interest will be charged against the State
agency from the date the demand leter was sent, at the rate established
by the Secretary of Treasury.
[[Page 55]]
(5) Use of recovered payment. The amounts recovered by the State
agency from school food authorities may be utilized during the fiscal
year for which the funds were initially available, first, to make
payments to school food authorities for the purposes of the Program; and
second, to repay any State funds expended in the reimbursement of claims
under the Program and not otherwise repaid. Any amounts recovered which
are not so utilized shall be returned to FNS in accordance with the
requirements of this part.
(6) Exceptions. The State agency need not disallow payment or
collect an overpayment arising out of the situations described in
paragraphs (c)(6) (i) and (ii) of this section; provided that the school
food authority corrects the problem(s) to the satisfaction of the State
agency:
(i) When any review or audit reveals that a school food authority is
failing to meet the quantities for each meal element (food item/
component, menu item or other items, as applicable) as required under
Sec. 210.10.
(ii) when any review or audit reveals that a school food authority
is approving applications which indicate that the households' incomes
are within the Income Eligibility Guidelines issued by the Department or
the applications contain a food stamp or AFDC case number but the
applications are missing the documentation specified under 7 CFR 245.2
(a-4) (3) and/or (4); or
(iii) when any review or audit reveals that a school food
authority's failure to meet the nutrition standards of Sec. 210.10 is
unintentional and the school food authority is meeting the requirements
of a corrective plan developed and agreed to under paragraph (a)(1)(iii)
of this section.
(7) Claims adjustment. FNS will have the authority to determine the
amount of, to settle, and to adjust any claim arising under the Program,
and to compromise or deny such claim or any part thereof. FNS will also
have the authority to waive such claims if FNS determines that to do so
would serve the purposes of the Program. This provision shall not
diminish the authority of the Attorney General of the United States
under section 516 of title 28, U.S. Code, to conduct litigation on
behalf of the United States.
(d) Management evaluations. Each State agency shall provide FNS with
full opportunity to conduct management evaluations of all State agency
Program operations and shall provide OIG with full opportunity to
conduct audits of all State agency Program operations. Each State agency
shall make available its records, including records of the receipt and
disbursement of funds under the Program and records of any claim
compromised in accordance with this paragraph, upon a reasonable request
by FNS, OIG, or the Comptroller General of the United States. FNS and
OIG retain the right to visit schools and OIG also has the right to make
audits of the records and operations of any school. In conducting
management evaluations, reviews or audits for any fiscal year, the State
agency, FNS, or OIG may disregard any overpayment if the total
overpayment does not exceed $600 or, in the case of State agency claims
in State administered Programs, it does not exceed the amount
established under State law, regulations or procedure as a minimum
amount for which claim will be made for State losses but not to exceed
$600. However, no overpayment is to be disregarded where there is
substantial evidence of violations of criminal law or civil fraud
statutes.
(e) Additional requirements. Nothing contained in this part shall
prevent a State agency from imposing additional requirements for
participation in the Program which are not inconsistent with the
provisions of this part.
(f) Cooperation with the Child and Adult Care Food Program. On an
annual basis, the State agency shall provide the State agency which
administers the Child and Adult Care Food Program with a list of all
elementary schools in the State participating in the National School
Lunch Program in which 50 percent or more of enrolled children have been
determined eligible for free or reduced price meals as of the last
operating day of the previous October, or other month specified by the
State agency. The first list shall be provided by March 15, 1997;
subsequent lists shall be provided by February 1 of each year or, if
data is based on a
[[Page 56]]
month other than October, within 90 calendar days following the end of
the month designated by the State agency. The State agency may provide
updated free and reduced price enrollment data on individual schools to
the State agency which administers the Child and Adult Care Food Program
only when unusual circumstances render the initial data obsolete. In
addition, the State agency shall provide the current list, upon request,
to sponsoring organizations of day care homes participating in the Child
and Adult Care Food Program.
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12582, Mar. 28, 1989; 56
FR 32947, July 17, 1991; 57 FR 38586, Aug. 26, 1992; 59 FR 1894, Jan.
13, 1994; 60 FR 31215, June 13, 1995; 60 FR 57147, Nov. 14, 1995; 62 FR
901, Jan. 7, 1997; 63 FR 9104, Feb. 24, 1998; 64 FR 50741, Sept. 20,
1999; 65 FR 26912, 26922, May 9, 2000]
Sec. 210.20 Reporting and recordkeeping.
(a) Reporting summary. Participating State agencies shall submit
forms and reports to FNS to demonstrate compliance with Program
requirements. The reports include but are not limited to:
(1) Requests for cash to make reimbursement payments to school food
authorities as required under Sec. 210.5(a);
(2) Information on the amounts of Federal Program funds expended and
obligated to date (SF-269) as required under Sec. 210.5(d);
(3) Statewide totals on Program participation (FNS-10) as required
under Sec. 210.5(d);
(4) Information on State funds provided by the State to meet the
State matching requirements (FNS-13) specified under Sec. 210.17(g);
(5) The names of school food authorities in need of a follow-up
review;
(6) Results of reviews and audits;
(7) Results of the commodity preference survey and recommendations
for commodity purchases as required under Sec. 250.13(k) of this
chapter; and
(8) Results of the State agency's review of schools' compliance with
the food safety inspection requirement in Sec. 210.13(b) by November 15
following each of school years 2005-2006 through 2008-2009, beginning
November 15, 2006. The report will be based on data supplied by the
school food authorities in accordance with Sec. 210.15(a)(7).
(b) Recordkeeping summary. Participating State agencies are required
to maintain records to demonstrate compliance with Program requirements.
The records include but are not limited to:
(1) Accounting records and source documents to control the receipt,
custody and disbursement of Federal Program funds as required under
Sec. 210.5(a);
(2) Documentation supporting all school food authority claims paid
by the State agency as required under Sec. 210.5(d);
(3) Documentation to support the amount the State agency reported
having used for State revenue matching as required under Sec.
210.17(h);
(4) Records supporting the State agency's review of net cash
resources as required under Sec. 210.19(a);
(5) Reports on the results of investigations of complaints received
or irregularities noted in connection with Program operations as
required under Sec. 210.19(a)
(6) Records of all reviews and audits, including records of action
taken to correct Program violations; and records of fiscal action taken,
including documentation of recoveries made;
(7) State agency criteria for selecting schools for reviews and
small school food authorities for follow-up reviews;
(8) Documentation of action taken to disallow improper claims
submitted by school food authorities, as required by Sec. 210.19(c) and
as determined through claims processing, resulting from actions such as
reviews, audits and USDA audits;
(9) Records of USDA audit findings, State agency's and school food
authorities' responses to them and of corrective action taken as
required by Sec. 210.22(a);
(10) Records pertaining to civil rights responsibilities as defined
under Sec. 210.23(b);
(11) Records pertaining to the annual food preference survey of
school food authorities as required by Sec. 250.13(k) of this chapter;
and
(12) Records supplied by the school food authorities showing the
number of food safety inspections obtained by
[[Page 57]]
schools for each of school years 2005-2006 through 2008-2009.
[53 FR 29147, Aug. 2, 1988, as amended at 56 FR 32948, July 17, 1991; 56
FR 55527, Oct. 28, 1991; 64 FR 50741, Sept. 20, 1999; 70 FR 34630, June
15, 2005]
Subpart E_State Agency and School Food Authority Responsibilities
Sec. 210.21 Procurement.
(a) General. State agencies and school food authorities shall comply
with the requirements of 7 CFR part 3015 concerning the procurement of
supplies, food, equipment and other services with Program funds. These
requirements ensure that such materials and services are obtained for
the Program efficiently and economically and in compliance with
applicable laws and executive orders.
(b) Contractual responsibilities. The standards contained in 7 CFR
part 3015 do not relieve the State agency or school food authority of
any contractual responsibilities under its contracts. The State agency
or school food authority is the responsible authority, without recourse
to FNS, regarding the settlement and satisfaction of all contractual and
administrative issues arising out of procurements entered into in
connection with the Program. This includes, but is not limited to source
evaluation, protests, disputes, claims, or other matters of a
contractual nature. Matters concerning violation of law are to be
referred to the local, State, or Federal authority that has proper
jurisdiction.
(c) Procurement procedure. The State agency or school food authority
may use its own procurement procedures which reflect applicable State
and local laws and regulations, provided that procurements made with
Program funds adhere to the standards set forth in 7 CFR part 3015.
(d) Buy American.--(1) Definition of domestic commodity or product.
In this paragraph (d), the term `domestic commodity or product' means--
(i) An agricultural commodity that is produced in the United States;
and
(ii) A food product that is processed in the United States
substantially using agricultural commodities that are produced in the
United States.
(2) Requirement. (i) In general. Subject to paragraph (d)(2)(ii) of
this section, the Department shall require that a school food authority
purchase, to the maximum extent practicable, domestic commodities or
products.
(ii) Limitations. Paragraph (d)(2)(i) of this section shall apply
only to--
(A) A school food authority located in the contiguous United States;
and
(B) A purchase of domestic commodity or product for the school lunch
program under this part.
(3) Applicability to Hawaii. Paragraph (d)(2)(i) of this section
shall apply to a school food authority in Hawaii with respect to
domestic commodities or products that are produced in Hawaii in
sufficient quantities to meet the needs of meals provided under the
school lunch program under this part.
(e) Restrictions on the sale of milk. A school food authority
participating in the Program, or a person approved by a school
participating in the Program, must not directly or indirectly restrict
the sale or marketing of fluid milk (as described in paragraph(m)(1)(ii)
of this section) at any time or in any place on school premises or at
any school-sponsored event.
[53 FR 29147, Aug. 2, 1988, as amended at 64 FR 50741, Sept. 20, 1999;
70 FR 70033, Nov. 21, 2005]
Sec. 210.22 Audits.
(a) General. State agencies and school food authorities shall comply
with the requirements of 7 CFR part 3015 concerning the audit
requirements for recipients and subrecipients of the Department's
financial assistance.
(b) Audit procedure. These requirements call for organization-wide
financial and compliance audits to ascertain whether financial
operations are conducted properly; financial statements are presented
fairly; recipients and subrecipients comply with the laws and
regulations that affect the expenditures of Federal funds; recipients
and subrecipients have established procedures to meet the objectives of
federally assisted programs; and recipients and subrecipients are
providing accurate and reliable information concerning grant funds.
States and school
[[Page 58]]
food authorities shall use their own procedures to arrange for and
prescribe the scope of independent audits, provided that such audits
comply with the requirements set forth in 7 CFR part 3015.
Sec. 210.23 Other responsibilities.
(a) Free and reduced price lunches and meal supplements. State
agencies and school food authorities shall ensure that lunches and meal
supplements are made available free or at a reduced price to all
children who are determined by the school food authority to be eligible
for such benefits. The determination of a child's eligibility for free
or reduced price lunches and meal supplements is to be made in
accordance with 7 CFR part 245.
(b) Civil rights. In the operation of the Program, no child shall be
denied benefits or be otherwise discriminated against because of race,
color, national origin, age, sex, or disability. State agencies and
school food authorities shall comply with the requirements of: Title VI
of the Civil Rights Act of 1964; title IX of the Education Amendments of
1972; section 504 of the Rehabilitation Act of 1973; the Age
Discrimination Act of 1975; Department of Agriculture regulations on
nondiscrimination (7 CFR parts 15, 15a, and 15b); and FNS Instruction
113-6.
(c) Retention of records. State agencies and school food authorities
may retain necessary records in their original form or on microfilm.
State agency records shall be retained for a period of 3 years after the
date of submission of the final Financial Status Report for the fiscal
year. School food authority records shall be retained for a period of 3
years after submission of the final Claim for Reimbursement for the
fiscal year. In either case, if audit findings have not been resolved,
the records shall be retained beyond the 3-year period as long as
required for the resolution of the issues raised by the audit.
[53 FR 29147, Aug. 2, 1988, as amended at 58 FR 42489, Aug. 10, 1993; 64
FR 50741, Sept. 20, 1999]
Subpart F_Additional Provisions
Sec. 210.24 Withholding payments.
In accordance with Sec. 3015.103 of this title, the State agency
shall withhold Program payments, in whole or in part, to any school food
authority which has failed to comply with the provisions of this part.
Program payments shall be withheld until the school food authority takes
corrective action satisfactory to the State agency, or gives evidence
that such corrective action will be taken, or until the State agency
terminates the grant in accordance with Sec. 210.25 of this part.
Subsequent to the State agency's acceptance of the corrective actions,
payments will be released for any lunches served in accordance with the
provisions of this part during the period the payments were withheld.
[56 FR 32948, July 17, 1991]
Sec. 210.25 Suspension, termination and grant closeout procedures.
Whenever it is determined that a State agency has materially failed
to comply with the provisions of this part, or with FNS guidelines and
instructions, FNS may suspend or terminate the Program in whole, or in
part, or take any other action as may be available and appropriate. A
State agency may also terminate the Program by mutual agreement with
FNS. FNS and the State agency shall comply with the provisions of the
Department's Uniform Federal Assistance Regulations, 7 CFR part 3015,
subpart N concerning grant suspension, termination and closeout
procedures. Furthermore, the State agency shall apply these provisions
to suspension or termination of the Program in school food authorities.
[53 FR 29147, Aug. 2, 1988. Redesignated at 56 FR 32948, July 17, 1991]
Sec. 210.26 Penalties.
Whoever embezzles, willfully misapplies, steals, or obtains by fraud
any funds, assets, or property provided under this part whether received
directly or indirectly from the Department, shall if such funds, assets,
or property are of a value of $100 or more,
[[Page 59]]
be fined no more than $25,000 or imprisoned not more than 5 years or
both; or if such funds, assets, or property are of a value of less than
$100, be fined not more than $1,000 or imprisoned not more than 1 year
or both. Whoever receives, conceals, or retains for personal use or
gain, funds, assets, or property provided under this part, whether
received directly or indirectly from the Department, knowing such funds,
assets, or property have been embezzled, willfully misapplied, stolen,
or obtained by fraud, shall be subject to the same penalties.
[53 FR 29147, Aug. 2, 1988. Redesignated at 56 FR 32948, July 17, 1991,
as amended at 64 FR 50741, Sept. 20, 1999]
Sec. 210.27 Educational prohibitions.
In carrying out the provisions of the Act, the Department shall not
impose any requirements with respect to teaching personnel, curriculum,
instructions, methods of instruction, or materials of instruction in any
school as a condition for participation in the Program.
[53 FR 29147, Aug. 2, 1988. Redesignated at 56 FR 32948, July 17, 1991,
as amended at 64 FR 50741, Sept. 20, 1999]
Sec. 210.28 Pilot project exemptions.
Those State agencies or school food authorities selected for the
pilot projects mandated under section 18(d) of the Act may be exempted
by the Department from some or all of the counting and free and reduced
price application requirements of this part and 7 CFR part 245, as
necessary, to conduct an approved pilot project. Additionally, those
schools selected for pilot projects that also operate the School
Breakfast Program (7 CFR part 220) and/or the Special Milk Program for
Children (7 CFR part 215), may be exempted from the counting and free
and reduced price application requirements mandated under these
Programs. The Department shall notify the appropriate State agencies and
school food authorities of its determination of which requirements are
exempted after the Department's selection of pilot projects.
[55 FR 41504, Oct. 12, 1990. Redesignated at 56 FR 32948, July 17, 1991.
Further redesignated at 64 FR 50741, Sept. 20, 1999]
Sec. 210.29 Management evaluations.
(a) Management evaluations. FNS will conduct a comprehensive
management evaluation of each State agency's administration of the
National School Lunch Program.
(b) Basis for evaluations. FNS will evaluate all aspects of State
agency management of the Program using tools such as State agency
reviews as required under Sec. 210.18 or Sec. 210.18a of this part;
reviews conducted by FNS in accordance with Sec. 210.18 of this part;
FNS reviews of school food authorities and schools authorized under
Sec. 210.19(a)(4) of this part; follow-up reviews and actions taken by
the State agency to correct violations found during reviews; FNS
observations of State agency reviews; and audit reports.
(c) Scope of management evaluations. The management evaluation will
determine whether the State agency has taken steps to ensure school food
authority compliance with Program regulations, and whether the State
agency is administering the Program in accordance with Program
requirements and good management practices.
(1) Local compliance. FNS will evaluate whether the State agency has
actively taken steps to ensure that school food authorities comply with
the provisions of this part.
(2) State agency compliance. FNS will evaluate whether the State
agency has fulfilled its State level responsibilities, including, but
not limited to the following areas: use of Federal funds; reporting and
recordkeeping; agreements with school food authorities; review of food
service management company contracts; review of the claims payment
process; implementation of the State agency's monitoring
responsibilities; initiation and completion of corrective action;
recovery of overpayments; disallowance of claims that are not properly
payable; withholding of Program payments; oversight of school food
authority procurement activities; training and guidance activities;
civil rights; and compliance with the State
[[Page 60]]
Administrative Expense Funds requirements as specified in 7 CFR part
235.
(d) School food authority reviews. FNS will examine State agency
administration of the Program by reviewing local Program operations.
When conducting these reviews under paragraph (d)(2) of this section,
FNS will follow all the administrative review requirements specified in
Sec. 210.18(a)-(h) of this part. When FNS conducts reviews, the
findings will be sent to the State agency to ensure all the needed
follow-up activity occurs. The State agency will, in all cases, be
invited to accompany FNS reviewers.
(1) Observation of State agency reviews. FNS may observe the State
agency conduct of any review and/or any follow-up review as required
under this part. At State agency request, FNS may assist in the conduct
of the review.
(2) Section 210.18 reviews. FNS will conduct administrative reviews
or follow-up reviews in accordance with Sec. 210.18(a)-(h) of this part
which will count toward meeting the State agency responsibilities
identified under Sec. 210.18 of this part.
(3) School food authority appeal of FNS findings. When
administrative or follow-up review activity conducted by FNS in
accordance with the provisions of paragraph (d)(2) of this section
results in the denial of all or part of a Claim for Reimbursement or
withholding of payment, a school food authority may appeal the FNS
findings by filing a written request with the Chief, Administrative
Review Branch, U.S. Department of Agriculture, Food and Nutrition
Service, 3101 Park Center Drive, Alexandria, Virginia, 22302, in
accordance with the appeal procedures specified in this paragraph:
(i) The written request for a review of the record shall be
postmarked within 15 calendar days of the date the appellant received
the notice of the denial of all or a part of the Claim for Reimbursement
or withholding payment and the envelope containing the request shall be
prominently marked ``REQUEST FOR REVIEW''. FNS will acknowledge the
receipt of the request for appeal within 10 calendar days. The
acknowledgement will include the name and address of the FNS
Administrative Review Officer (ARO) reviewing the case. FNS will also
notify the State agency of the request for appeal.
(ii) The appellant may refute the action specified in the notice in
person and by written documentation to the ARO. In order to be
considered, written documentation must be filed with the ARO not later
than 30 calendar days after the appellant received the notice. The
appellant may retain legal counsel, or may be represented by another
person. A hearing shall be held by the ARO in addition to, or in lieu
of, a review of written information submitted by the appellant only if
the appellant so specifies in the letter of request for review. Failure
of the appellant school food authority's representative to appear at a
scheduled hearing shall constitute the appellant school food authority's
waiver of the right to a personal appearance before the ARO, unless the
ARO agrees to reschedule the hearing. A representative of FNS shall be
allowed to attend the hearing to respond to the appellant's testimony
and to answer questions posed by the ARO;
(iii) If the appellant has requested a hearing, the appellant shall
be provided with a least 10 calendar days advance written notice, sent
by certified mail, return receipt requested, of the time, date, and
place of the hearing;
(iv) Any information on which FNS's action was based shall be
available to the appellant for inspection from the date of receipt of
the request for review;
(v) The ARO shall be an independent and impartial official other
than, and not accountable to, any person authorized to make decisions
that are subject to appeal under the provisions of this section;
(vi) The ARO shall make a determination based on information
provided by FNS and the appellant, and on Program regulations;
(vii) Within 60 calendar days of the receipt of the request for
review, by written notice, sent by certified mail, return receipt
requested, the ARO shall inform FNS, the State agency and the appellant
of the determination of the ARO. The final determination shall take
effect upon receipt of the written
[[Page 61]]
notice of the final decision by the school food authority;
(viii) The action being appealed shall remain in effect during the
appeal process;
(ix) The determination by the ARO is the final administrative
determination to be afforded to the appellant.
(4) Coordination with State agency. FNS will coordinate school food
authority selection with the State agency to ensure that no unintended
overlap exists and to ensure reviews are conducted in a consistent
manner.
(e) Management evaluation findings. FNS will consider the results of
all its review activity within each State, including school food
authority reviews, in performing management evaluations and issuing
management evaluation reports. FNS will communicate the findings of the
management evaluation to appropriate State agency personnel in an exit
conference. Subsequent to the exit conference, the State agency will be
notified in writing of the management evaluation findings and any needed
corrective actions or fiscal sanctions in accordance with the provisions
Sec. 210.25 of this part and/or 7 CFR part 235.
[56 FR 32949, July 17, 1991, as amended at 57 FR 38586, Aug. 26, 1992.
Redesignated at 64 FR 50741, Sept. 20, 1999]
Sec. 210.30 Regional office addresses.
School food authorities desiring information concerning the Program
should write to their State educational agency or to the appropriate
Regional Office of FNS as indicated below:
(a) In the States of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, and Vermont: Northeast Regional
Office, FNS, U.S. Department of Agriculture, 10 Causeway Street, Room
501, Boston, Massachusetts 02222-1065.
(b) In the States of Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina, and Tennessee: Southeast
Regional Office, FNS, U.S. Department of Agriculture, 61 Forsyth Street
SW, Room 8T36, Atlanta, Georgia 30303.
(c) In the States of Illinois, Indiana, Michigan, Minnesota, Ohio,
and Wisconsin: Midwest Regional Office, FNS, U.S. Department of
Agriculture, 77 West Jackson Boulevard, 20th Floor, Chicago, Illinois
60604-3507.
(d) In the States of Arkansas, Louisiana, New Mexico, Oklahoma, and
Texas: Southwest Regional Office, FNS, U.S. Department of Agriculture,
1100 Commerce Street, Room 5-C-30, Dallas, Texas 75242.
(e) In the States of Alaska, American Samoa, Arizona, California,
Guam, Hawaii, Idaho, Nevada, Oregon, the Commonwealth of the Northern
Mariana Islands, and Washington: Western Regional Office, FNS, U.S.
Department of Agriculture, 550 Kearny Street, Room 400, San Francisco,
California 94108.
(f) In the States of Delaware, District of Columbia, Maryland, New
Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands, and West
Virginia: Mid-Atlantic Regional Office, FNS, U.S. Department of
Agriculture, 300 Corporate Boulevard, Robbinsville, New Jersey 08691-
1598.
(g) In the States of Colorado, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah, and Wyoming: Mountain Plains
Regional Office, FNS, U.S. Department of Agriculture, 1244 Speer
Boulevard, Suite 903, Denver, Colorado 80204.
[53 FR 29147, Aug. 2, 1988. Redesignated at 55 FR 41503, Oct. 12, 1990.
Further redesignated at 56 FR 32948, July 17, 1991. Further redesignated
at 64 FR 50741, Sept. 20, 1999; 65 FR 12434, Mar. 9, 2000]
Sec. 210.31 OMB control numbers.
The following control numbers have been assigned to the information
collection requirements in 7 CFR part 210 by the Office of Management
and Budget pursuant to the Paperwork Reduction Act of 1980, Pub. L. 96-
511.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control No.
------------------------------------------------------------------------
210.3(b)............................................... 0584-0327
210.5(d)............................................... 0584-0006
210.5(d)(1)............................................ 0584-0002
210.5(d)(2)............................................ 0584-0341
210.5(d)(3)............................................ 0584-0341
210.6(b)............................................... 0584-0006
210.8.................................................. 0584-0006
0584-0284
210.9.................................................. 0584-0006
0584-0026
0584-0329
210.10(b).............................................. 0584-0006
210.10(i)(1)........................................... 0584-0006
210.14(c).............................................. 0584-0006
210.16................................................. 0584-0006
210.17................................................. 0584-0006
[[Page 62]]
210.17(g).............................................. 0584-0075
210.18................................................. 0584-0006
210.19................................................. 0584-0006
210.22................................................. 0584-0006
210.23(c).............................................. 0584-0006
210.24................................................. 0584-0006
210.27................................................. 0584-0006
------------------------------------------------------------------------
[53 FR 29147, Aug. 2, 1990. Redesignated at 55 FR 41503, Oct. 12, 1990.
Further redesignated at 56 FR 32948, July 17, 1991. Further redesignated
at 64 FR 50741, Sept. 20, 1999]
Appendix A to Part 210--Alternate Foods for Meals
I. Enriched Macaroni Products with Fortified Protein
1. Schools may utilize the enriched macaroni products with fortified
protein defined in paragraph 3 as a food item in meeting the meal
requirements of this part under the following terms and conditions:
(a) One ounce (28.35 grams) of a dry enriched macaroni product with
fortified protein may be used to meet not more than one-half of the meat
or meat alternate requirements specified in Sec. 210.10, when served in
combination with 1 or more ounces (28.35 grams) of cooked meat, poultry,
fish, or cheese. The size of servings of the cooked combination may be
adjusted for various age groups.
(b) Only enriched macaroni products with fortified protein that bear
a label containing substantially the following legend shall be so
utilized: ``One ounce (28.35 grams) dry weight of this product meets
one-half of the meat or meat alternate requirements of lunch or supper
of the USDA child nutrition programs when served in combination with 1
or more ounces (28.35 grams) of cooked meat, poultry, fish, or cheese.
In those States where State or local law prohibits the wording
specified, a legend acceptable to both the State or local authorities
and FNS shall be substituted.''
(c) Enriched macaroni product may not be used for infants under 1
year of age.
2. Only enriched macaroni products with fortified protein that have
been accepted by FNS for use in the USDA Child Nutrition Programs may be
labeled as provided in paragraph 1(b) of this appendix. Manufacturers
seeking acceptance of their product shall furnish FNS a chemical
analysis, the Protein Digestibility-Corrected Amino Acid Score (PDCAAS),
and such other pertinent data as may be requested by FNS, except that
prior to November 7, 1994, manufacturers may submit protein efficiency
ratio analysis in lieu of the PDCAAS. This information is to be
forwarded to: Director, Nutrition and Technical Services Division, Food
and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center
Drive, room 607, Alexandria, VA 22302. All laboratory analyses are to be
performed by independent or other laboratories acceptable to FNS. (FNS
prefers an independent laboratory.) All laboratories shall retain the
``raw'' laboratory data for a period of 1 year. Such information shall
be made available to FNS upon request. Manufacturers must notify FNS if
there is a change in the protein portion of their product after the
original testing. Manufacturers who report such a change in protein in a
previously approved product must submit protein data in accordance with
the method specified in this paragraph.
3. The product should not be designed in such a manner that would
require it to be classified as a Dietary Supplement as described by the
Food and Drug Administration (FDA) in 21 CFR part 105. To be accepted by
FNS, enriched macaroni products with fortified protein must conform to
the following requirements:
(a)(1) Each of these foods is produced by drying formed units of
dough made with one or more of the milled wheat ingredients designated
in 21 CFR 139.110(a) and 139.138(a), and other ingredients to enable the
finished food to meet the protein requirements set out in paragraph
3.(a)(2)(i) under Enriched Macaroni Products with Fortified Protein in
this appendix. Edible protein sources, including food grade flours or
meals made from nonwheat cereals or from oilseeds, may be used. Vitamin
and mineral enrichment nutrients are added to bring the food into
conformity with the requirements of paragraph (b) under Enriched
Macaroni Products with Fortified Protein in this appendix. Safe and
suitable ingredients, as provided for in paragraph (c) under Enriched
Macaroni Products with Fortified Protein in this appendix, may be added.
The proportion of the milled wheat ingredient is larger than the
proportion of any other ingredient used.
(2) Each such finished food, when tested by the methods described in
the pertinent sections of ``Official Methods of Analysis of the AOAC
International,'' (formerly the Association of Official Analytical
Chemists), 15th Ed. (1990) meets the following specifications. This
publication is incorporated by reference in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may be obtained from the AOAC
International, 2200 Wilson Blvd., suite 400, Arlington, VA 22201-3301.
This publication may be examined at the Food and Nutrition Service,
Nutrition and Technical Services Division, 3101 Park Center Drive, room
607, Alexandria, Virginia 22302 or at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal--register/code--of--federal--regulations/ibr--locations.html.
[[Page 63]]
(i) The protein content (Nx6.25) is not less than 20 percent by
weight (on a 13 percent moisture basis) as determined by the appropriate
method of analysis in the AOAC manual cited in (a)(2) under Enriched
Macaroni Products with Fortified Protein in this appendix. The protein
quality is not less than 95 percent that of casein as determined on a
dry basis by the PDCAAS method as described below:
(A) The PDCAAS shall be determined by the methods given in sections
5.4.1, 7.2.1. and 8.0 as described in ``Protein Quality Evaluation,
Report of the Joint FAO/WHO Expert Consultation on Protein Quality
Evaluation,'' Rome, 1990, as published by the Food and Agriculture
Organization (FAO) of the United Nations/World Health Organization
(WHO). This report is incorporated by reference in accordance with 5
U.S.C. 552(a) and 1 CFR part 51. Copies of this report may be obtained
from the Nutrition and Technical Services Division, Food and Nutrition
Service, 3101 Park Center Drive, room 607, Alexandria, Virginia 22302.
This report may also be inspected at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal--register/code--of--federal--regulations/ibr--locations.html.
(B) The standard used for assessing protein quality in the PDCAAS
method is the amino acid scoring pattern established by FAO/WHO and
United Nations University (UNU) in 1985 for preschool children 2 to 5
years of age which has been adopted by the National Academy of Sciences,
Recommended Dietary Allowances (RDA), 1989.
(C) To calculate the PDCAAS for an individual food, the test food
must be analyzed for proximate analysis and amino acid composition
according to AOAC methods.
(D) The PDCAAS may be calculated using FDA's limited data base of
published true digestibility values (determined using humans and rats).
The true digestibility values contained in the WHO/FAO report referenced
in paragraph 3.(a)(2)(i)(A) under Enriched Macaroni Products with
Fortified Protein in this appendix may also be used. If the
digestibility of the protein is not available from these sources it must
be determined by a laboratory according to methods in the FAO/WHO report
(sections 7.2.1 and 8.0).
(E) The most limiting essential amino acid (that is, the amino acid
that is present at the lowest level in the test food compared to the
standard) is identified in the test food by comparing the levels of
individual amino acids in the test food with the 1985 FAO/WHO/UNU
pattern of essential amino acids established as a standard for children
2 to 5 years of age.
(F) The value of the most limiting amino acid (the ratio of the
amino acid in the test food over the amino acid value from the pattern)
is multiplied by the percent of digestibility of the protein. The
resulting number is the PDCAAS.
(G) The PDCAAS of food mixtures must be calculated from data for the
amino acid composition and digestibility of the individual components by
means of a weighted average procedure. An example for calculating a
PDCAAS for a food mixture of varying protein sources is shown in section
8.0 of the FAO/WHO report cited in paragraph 3.(a)(2)(i)(A) under
Enriched Macaroni Products with Fortified Protein in this appendix.
(H) For the purpose of this regulation, each 100 grams of the
product (on a 13 percent moisture basis) must contain protein in amounts
which is equivalent to that provided by 20 grams of protein with a
quality of not less than 95 percent casein. The equivalent grams of
protein required per 100 grams of product (on a 13 percent moisture
basis) would be determined by the following equation:
[GRAPHIC] [TIFF OMITTED] TR07OC94.022
X=grams of protein required per 100 grams of product
a=20 grams (amount of protein if casein)
b=.95 [95% x 1 (PDCAAS of casein)
c=PDCAAS for protein used in formulation
(ii) The total solids content is not less than 87 percent by weight
as determined by the methods described in the ``Official Methods of
Analysis of the AOAC International'' cited in paragraph (a)(2) under
Enriched Macaroni Products with Fortified Protein in this appendix.
(b)(1) Each pound of food covered by this section shall contain 5
milligrams of thiamine, 2.2 milligrams of riboflavin, 34 milligrams of
niacin or niacinamide, and 16.5 milligrams of iron.
(2) Each pound of such food may also contain 625 milligrams of
calcium.
(3) Only harmless and assimilable forms of iron and calcium may be
added. The enrichment nutrients may be added in a harmless carrier used
only in a quantity necessary to effect a uniform distribution of the
nutrients in the finished food. Reasonable overages, within the limits
of good manufacturing practice, may be used to assure that the
prescribed levels of the vitamins and mineral(s) in paragraphs (b)(1)
and (2) under Enriched Macaroni Products with Fortified Protein in this
appendix are maintained throughout the expected shelf life of the food
under customary conditions of distribution.
(c) Ingredients that serve a useful purpose such as to fortify the
protein or facilitate production of the food are the safe and suitable
ingredients referred to in paragraph (a) under Enriched Macaroni
Products with Fortified Protein in this appendix. This does not
[[Page 64]]
include color additives, artificial flavorings, artificial sweeteners,
chemical preservatives, or starches. Ingredients deemed suitable for use
by this paragraph are added in amounts that are not in excess of those
reasonably required to achieve their intended purposes. Ingredients are
deemed to be safe if they are not food additives within the meaning of
section 201(s) of the Federal Food, Drug and Cosmetic Act, or in case
they are food additives if they are used in conformity with regulations
established pursuant to section 409 of the act.
(d)(1) The name of any food covered by this section is ``Enriched
Wheat ---------------- Macaroni Product with Fortified Protein'', the
blank being filled in with appropriate word(s) such as ``Soy'' to show
the source of any flours or meals used that were made from non-wheat
cereals or from oilseeds. In lieu of the words ``Macaroni Product'' the
words ``Macaroni'', ``Spaghetti'', or ``Vermicelli'' as appropriate, may
be used if the units conform in shape and size to the requirements of 21
CFR 139.110 (b), (c), or (d).
(2) When any ingredient not designated in the part of the name
prescribed in paragraph (d)(1) under Enriched Macaroni Products with
Fortified Protein in this appendix, is added in such proportion as to
contribute 10 percent or more of the quantity of protein contained in
the finished food, the name shall include the statement ``Made with ----
------------'', the blank being filled in with the name of each such
ingredient, e.g. ``Made with nonfat milk''.
(3) When, in conformity with paragraph (d)(1) or (d)(2) under
Enriched Macaroni Products with Fortified Protein in this appendix, two
or more ingredients are listed in the name, their designations shall be
arranged in descending order of predominance by weight.
(4) If a food is made to comply with a section of 21 CFR part 139,
but also meets the compositional requirements of the Enriched Macaroni
with Fortified Protein Appendix, it may alternatively bear the name set
out in the other section.
(e) Each ingredient used shall declare its common name as required
by the applicable section of 21 CFR part 101. In addition, the
ingredients statement shall appear in letters not less than one half the
size of that required by 21 CFR 101.105 for the declaration of net
quantity of contents, and in no case less than one-sixteenth of an inch
in height.
II. Alternate Protein Products
A. What Are the Criteria for Alternate Protein Products Used in the
National School Lunch Program?
1. An alternate protein product used in meals planned under the
food-based menu planning approaches in Sec. 210.10(k), must meet all of
the criteria in this section.
2. An alternate protein product whether used alone or in combination
with meat or other meat alternates must meet the following criteria:
a. The alternate protein product must be processed so that some
portion of the non-protein constituents of the food is removed. These
alternate protein products must be safe and suitable edible products
produced from plant or animal sources.
b. The biological quality of the protein in the alternate protein
product must be at least 80 percent that of casein, determined by
performing a Protein Digestibility Corrected Amino Acid Score (PDCAAS).
c. The alternate protein product must contain at least 18 percent
protein by weight when fully hydrated or formulated. (``When hydrated or
formulated'' refers to a dry alternate protein product and the amount of
water, fat, oil, colors, flavors or any other substances which have been
added).
d. Manufacturers supplying an alternate protein product to
participating schools or institutions must provide documentation that
the product meets the criteria in paragraphs A2. a through c of this
appendix.
e. Manufacturers should provide information on the percent protein
contained in the dry alternate protein product and on an as prepared
basis.
f. For an alternate protein product mix, manufacturers should
provide information on:
(1) the amount by weight of dry alternate protein product in the
package;
(2) hydration instructions; and
(3) instructions on how to combine the mix with meat or other meat
alternates.
B. How Are Alternate Protein Products Used in the National School Lunch
Program?
1. Schools, institutions, and service institutions may use alternate
protein products to fulfill all or part of the meat/meat alternate
component discussed in Sec. 210.10.
2. The following terms and conditions apply:
a. The alternate protein product may be used alone or in combination
with other food ingredients. Examples of combination items are beef
patties, beef crumbles, pizza topping, meat loaf, meat sauce, taco
filling, burritos, and tuna salad.
b. Alternate protein products may be used in the dry form
(nonhydrated), partially hydrated or fully hydrated form. The moisture
content of the fully hydrated alternate protein product (if prepared
from a dry concentrated form) must be such that the mixture will have a
minimum of 18 percent protein by weight or equivalent amount for the dry
or partially hydrated form (based on the level that would be provided if
the product were fully hydrated).
[[Page 65]]
C. How Are Commercially Prepared Products Used in the National School
Lunch Program?
Schools, institutions, and service institutions may use a
commercially prepared meat or meat alternate product combined with
alternate protein products or use a commercially prepared product that
contains only alternate protein products.
[51 FR 34874, Sept. 30, 1986; 51 FR 41295, Nov. 14, 1986, as amended at
53 FR 29164, Aug. 2, 1988; 59 FR 51086, Oct. 7, 1994; 60 FR 31216; June
13, 1995; 61 FR 37671, July 19, 1996; 65 FR 12434, Mar. 9, 2000; 65 FR
26912, May 9, 2000; 69 FR 18803, Apr. 9, 2004]
Appendix B to Part 210--Categories of Foods of Minimal Nutritional Value
(a) Foods of minimal nutritional value--Foods of minimal nutritional
value are:
(1) Soda Water--A class of beverages made by absorbing carbon
dioxide in potable water. The amount of carbon dioxide used is not less
than that which will be absorbed by the beverage at a pressure of one
atmosphere and at a temperature of 60[deg] F. It either contains no
alcohol or only such alcohol, not in excess of 0.5 percent by weight of
the finished beverage, as is contributed by the flavoring ingredient
used. No product shall be excluded from this definition because it
contains artificial sweeteners or discrete nutrients added to the food
such as vitamins, minerals and protein.
(2) Water Ices--As defined by 21 CFR 135.160 Food and Drug
Administration Regulations except that water ices which contain fruit or
fruit juices are not included in this definition.
(3) Chewing Gum--Flavored products from natural or synthetic gums
and other ingredients which form an insoluble mass for chewing.
(4) Certain Candies--Processed foods made predominantly from
sweeteners or artifical sweeteners with a variety of minor ingredients
which characterize the following types:
(i) Hard Candy--A product made predominantly from sugar (sucrose)
and corn syrup which may be flavored and colored, is characterized by a
hard, brittle texture, and includes such items as sour balls, fruit
balls, candy sticks, lollipops, starlight mints, after dinner mints,
sugar wafers, rock candy, cinnamon candies, breath mints, jaw breakers
and cough drops.
(ii) Jellies and Gums--A mixture of carbohydrates which are combined
to form a stable gelatinous system of jelly-like character, and are
generally flavored and colored, and include gum drops, jelly beans,
jellied and fruit-flavored slices.
(iii) Marshmallow Candies--An aerated confection composed as sugar,
corn syrup, invert sugar, 20 percent water and gelatin or egg white to
which flavors and colors may be added.
(iv) Fondant--A product consisting of microscopic-sized sugar
crystals which are separated by thin film of sugar and/or invert sugar
in solution such as candy corn, soft mints.
(v) Licorice--A product made predominantly from sugar and corn syrup
which is flavored with an extract made from the licorice root.
(vi) Spun Candy--A product that is made from sugar that has been
boiled at high temperature and spun at a high speed in a special
machine.
(vii) Candy Coated Popcorn--Popcorn which is coated with a mixture
made predominantly from sugar and corn syrup.
(b) Petitioning Procedures--Reconsideration of the list of foods of
minimal nutritional value identified in paragraph (a) of this section
may be pursued as follows:
(1) Any person may submit a petition to FNS requesting that an
individual food be exempted from a category of foods of minimal
nutritional value listed in paragraph (a). In the case of artificially
sweetened foods, the petition must include a statement of the percent of
Reference Daily Intake (RDI) for the eight nutrients listed in Sec.
210.11(a)(2) ``Foods of minimal nutritional value,'' that the food
provides per serving and the petitioner's source of this information. In
the case of all other foods, the petition must include a statement of
the percent of RDI for the eight nutrients listed in Sec. 210.11(a)(2)
``Foods of minimal nutritional value,'' that the food provides per
serving and per 100 calories and the petitioner's source of this
information. The Department will determine whether or not the individual
food is a food of minimal nutritional value as defined in Sec.
210.11(a)(2) and will inform the petitioner in writing of such
determination, and the public by notice in the Federal Register as
indicated below under paragraph (b)(3) of this section. In determining
whether an individual food is a food of minimal nutritional value,
discrete nutrients added to the food will not be taken into account.
(2) Any person may submit a petition to FNS requesting that foods in
a particular category of foods be classified as foods of minimal
nutritional value as defined in Sec. 210.11(a)(2). The petition must
identify and define the food category in easily understood language,
list examples of the food contained in the category and include a list
of ingredients which the foods in that category usually contain. If,
upon review of the petition, the Department determines that the foods in
that category should not be classified as foods of minimal nutritional
value, the petitioners will be so notified in writing. If, upon review
of the petition, the Department determines that there is a substantial
likelihood that the foods in that category should be
[[Page 66]]
classified as foods of minimal nutritional value as defined in Sec.
210.11(a)(2), the Department shall at that time inform the petitioner.
In addition, the Department shall publish a proposed rule restricting
the sale of foods in that category, setting forth the reasons for this
action, and soliciting public comments. On the basis of comments
received within 60 days of publication of the proposed rule and other
available information, the Department will determine whether the
nutrient composition of the foods indicates that the category should be
classified as a category of foods of minimal nutritional value. The
petitioner shall be notified in writing and the public shall be notified
of the Department's final determination upon publication in the Federal
Register as indicated under paragraph (b)(3) of this section.
(3) By May 1 and November 1 of each year, the Department will amend
appendix B to exclude those individual foods identified under paragraph
(b)(1) of this section, and to include those categories of foods
identified under paragraph (b)(2) of this section, provided, that there
are necessary changes. The schedule for amending appendix B is as
follows:
------------------------------------------------------------------------
Publication
Actions for publication ---------------------------------------
May November
------------------------------------------------------------------------
Deadline for receipt of Nov. 15........... May 15.
petitions by USDA.
USDA to notify petitioners of Feb. 1............ Aug. 1.
results of Departmental review
and publish proposed rule (if
applicable).
60 Day comment period........... Feb. 1 through Aug. 1 through
Apr. 1. Oct. 1.
Public notice of amendment of May 1............. Nov. 1.
appendix B by.
------------------------------------------------------------------------
(4) Written petitions should be sent to the Chief, Technical
Assistance Branch, Nutrition and Technical Services Division, FNS, USDA,
Alexandria, Virginia 22302, on or before November 15 or May 15 of each
year. Petitions must include all information specified in paragraph (b)
of this appendix and Sec. 220.12(b) (1) or (2) as appropriate.
[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 18465, May 1, 1989; 59
FR 23614, May 6, 1994]
Appendix C to Part 210--Child Nutrition Labeling Program
1. The Child Nutrition (CN) Labeling Program is a voluntary
technical assistance program administered by the Food and Nutrition
Service in conjunction with the Food Safety and Inspection Service
(FSIS), and Agricultural Marketing Service (AMS) of the U.S. Department
of Agriculture, and National Marine Fisheries Service of the U.S.
Department of Commerce (USDC) for the Child Nutrition Programs. This
program essentially involves the review of a manufacturer's recipe or
product formulation to determine the contribution a serving of a
commercially prepared product makes toward meal pattern requirements and
a review of the CN label statement to ensure its accuracy. CN labeled
products must be produced in accordance with all requirements set forth
in this rule.
2. Products eligible for CN labels are as follows:
(a) Commercially prepared food products that contribute
significantly to the meat/meat alternate component of meal pattern
requirements of 7 CFR 210.10, 225.20, and 226.20 and are served in the
main dish.
(b) Juice drinks and juice drink products that contain a minimum of
50 percent full-strength juice by volume.
3. For the purpose of this appendix the following definitions apply:
(a) ``CN label'' is a food product label that contains a CN label
statement and CN logo as defined in paragraph 3 (b) and (c) below.
(b) The ``CN logo'' (as shown below) is a distinct border which is
used around the edges of a ``CN label statement'' as defined in
paragraph 3(c).
[GRAPHIC] [TIFF OMITTED] TC17SE91.000
(c) The ``CN label statement'' includes the following:
(1) The product identification number (assigned by FNS),
[[Page 67]]
(2) The statement of the product's contribution toward meal pattern
requirements of 7 CFR 210.10, Sec. 220.8 or Sec. 220.8a, whichever is
applicable, Sec. Sec. 225.20, and 226.20. The statement shall identify
the contribution of a specific portion of a meat/meat alternate product
toward the meat/meat alternate, bread/bread alternate, and/or vegetable/
fruit component of the meal pattern requirements. For juice drinks and
juice drink products the statement shall identify their contribution
toward the vegetable/fruit component of the meal pattern requirements,
(3) Statement specifying that the use of the CN logo and CN
statement was authorized by FNS, and
(4) The approval date.
For example:
[GRAPHIC] [TIFF OMITTED] TC17SE91.001
(d) Federal inspection means inspection of food products by FSIS,
AMS or USDC.
4. Food processors or manufacturers may use the CN label statement
and CN logo as defined in paragraph 3 (b) and (c) under the following
terms and conditions:
(a) The CN label must be reviewed and approved at the national level
by FNS and appropriate USDA or USDC Federal agency responsible for the
inspection of the product.
(b) The CN labeled product must be produced under Federal inspection
by USDA or USDC. The Federal inspection must be performed in accordance
with an approved partial or total quality control program or standards
established by the appropriate Federal inspection service.
(c) The CN label statement must be printed as an integral part of
the product label along with the product name, ingredient listing, the
inspection shield or mark for the appropriate inspection program, the
establishment number where appropriate, and the manufacturer's or
distributor's name and address. The inspection marking for CN labeled
non-meat, non-poultry, and non-seafood products with the exception of
juice drinks and juice drink products is established as follows:
[GRAPHIC] [TIFF OMITTED] TC17SE91.002
(d) Yields for determining the product's contribution toward meal
pattern requirements must be calculated using the Food Buying Guide for
Child Nutrition Programs (Program AID Number 1331).
5. In the event a company uses the CN logo and CN label statement
inappropriately, the company will be directed to discontinue the use of
the logo and statement and the matter will be referred to the
appropriate agency for action to be taken against the company.
6. Products that bear a CN label statement as set forth in paragraph
3(c) carry a warranty. This means that if a food service authority
participating in the Child Nutrition Programs purchases a CN labeled
product and uses it in accordance with the manufacturer's directions,
the school or institution will not have an audit claim filed against it
for the CN labeled product for noncompliance with the meal pattern
requirements of 7 CFR 210.10, Sec. 220.8 or Sec. 220.8a, whichever is
applicable, Sec. Sec. 225.20, and 226.20. If a State or Federal auditor
finds that a product that is CN labeled does not actually meet the meal
pattern requirements claimed on the label, the auditor will report this
finding to FNS. FNS will prepare a report of the findings and send it to
the appropriate divisions of FSIS and AMS of the USDA, National Marine
Fisheries Services of the USDC, Food and Drug Administration, or the
Department of Justice for action against the company. Any or all of the
following courses of action may be taken:
(a) The company's CN label may be revoked for a specific period of
time;
(b) The appropriate agency may pursue a misbranding or mislabeling
action against the company producing the product;
(c) The company's name will be circulated to regional FNS offices;
(d) FNS will require the food service program involved to notify the
State agency of the labeling violation.
7. FNS is authorized to issue operational policies, procedures, and
instructions for the CN Labeling Program. To apply for a CN label and to
obtain additional information on CN label application procedures write
to: CN Labels, U.S. Department of Agriculture, Food and Nutrition
Service, Nutrition and
[[Page 68]]
Technical Services Division, 3101 Park Center Drive, Alexandria,
Virginia 22302.
[51 FR 34874, Sept. 30, 1986, as amended at 53 FR 29164, Aug. 2, 1988;
60 FR 31216, June 13, 1995; 65 FR 26912, May 9, 2000]
PART 215_SPECIAL MILK PROGRAM FOR CHILDREN--Table of Contents
Sec.
215.1 General purpose and scope.
215.2 Definitions.
215.3 Administration.
215.4 Payments of funds to States and FNSROs.
215.5 Method of payment to States.
215.6 Use of funds.
215.7 Requirements for participation.
215.8 Reimbursement payments.
215.9 Effective date for reimbursement.
215.10 Reimbursement procedures.
215.11 Special responsibilities of State agencies.
215.12 Claims against schools or child-care institutions.
215.13 Management evaluations and audits.
215.13a Determining eligibility for free milk in child-care
institutions.
215.14 Nondiscrimination.
215.14a Procurement standards.
215.15 Suspension, termination and grant closeout procedures.
215.16 Program information.
215.17 Information collection/recordkeeping--OMB assigned control
numbers.
Authority: 42 U.S.C. 1772 and 1779.
Sec. 215.1 General purpose and scope.
This part announces the policies and prescribes the general
regulations with respect to the Special Milk Program for Children, under
the Child Nutrition Act of 1966, as amended, and sets forth the general
requirements for participation in the program. The Act reads in
pertinent part as follows:
Section 3(a)(1) There is hereby authorized to be appropriated for
the fiscal year ending June 30, 1970, and for each succeeding fiscal
year such sums as may be necessary to enable the Secretary of
Agriculture, under such rules and regulations as he may deem in the
public interest, to encourage consumption of fluid milk by children in
the United States in (A) nonprofit schools of high school grade and
under, except as provided in paragraph (2), which do not participate in
a meal service program authorized under this Act or the National School
Lunch Act, and (B) nonprofit nursery schools, child care centers,
settlement houses, summer camps, and similar nonprofit institutions
devoted to the care and training of children, which do not participate
in a meal service program authorized under this Act or the National
School Lunch Act.
(2) The limitation imposed under paragraph (1)(A) for participation
of nonprofit schools in the special milk program shall not apply to
split-session kindergarten programs conducted in schools in which
children do not have access to the meal service program operating in
schools the children attend as authorized under this Act or the National
School Lunch Act (42 U.S.C. 1751 et seq.).
(3) For the purposes of this section ``United States'' means the
fifty States, Guam, the Commonwealth of Puerto Rico, the Virgin Islands,
American Samoa, the Trust Territory of the Pacific Islands, and the
District of Columbia.
(4) The Secretary shall administer the special milk program provided
for by this section to the maximum extent practicable in the same manner
as he administered the special milk program provided for by Pub. L. 89-
642, as amended, during the fiscal year ending June 30, 1969.
(5) Any school or nonprofit child care institution which does not
participate in a meal service program authorized under this Act or the
National School Lunch Act shall receive the special milk program upon
their request.
(6) Children who qualify for free lunches under guidelines
established by the Secretary shall, at the option of the school involved
(or of the local educational agency involved in the case of a public
school) be eligible for free milk upon their request.
(7) For the fiscal year ending June 30, 1975, and for subsequent
school years, the minimum rate of reimbursement for a half-pint of milk
served in schools and other eligible institutions shall not be less than
5 cents per half-pint served to eligible children, and such minimum rate
of reimbursement shall be adjusted on an annual basis each school year
to reflect changes in the Producer Price Index for Fresh Processed Milk
published by the Bureau of Labor Statistics of the Department of Labor.
(8) Such adjustment shall be computed to the nearest one-fourth
cent.
(9) Notwithstanding any other provision of this section, in no event
shall the minimum rate of reimbursement exceed the cost to the school or
institution of milk served to children.
[52 FR 7562, Mar. 12, 1987]
Sec. 215.2 Definitions.
For the purpose of this part, the term:
(a) Act means the Child Nutrition Act of 1966.
(b) Adults means those persons not included under the definition of
children.
[[Page 69]]
(c) [Reserved]
(d) Child and Adult Care Food Program means the program authorized
by section 17 of the National School Lunch Act, as amended.
(e) Child-care institution means any nonprofit nursery school,
child-care center, settlement house, summer camp, service institution
participating in the Summer Food Program for Children pursuant to part
225 of this chapter, institution participating in the Child and Adult
Care Food Program pursuant to part 226 of this chapter, or similar
nonprofit institution devoted to the care and training of children. The
term ``child-care institution'' also includes a nonprofit agency to
which such institution has delegated authority for the operation of a
milk program in the institution. It does not include any institution
falling within the definition of ``School'' in paragraph (v) of this
section.
(e-1) Children means persons under 19 chronological years of age in
child-care institutions as defined in Sec. 215.2(e); or persons under
21 chronological years of age attending schools as defined in Sec.
215.2(v)(3) and (4) of this part; or students, including students who
are mentally or physically disabled as defined by the State and who are
participating in a school program established for the mentally or
physically disabled, of high school grade or under as determined by the
State educational agency in schools as defined in Sec. 215.2(v)(1) and
(2) of this part.
(e-2) CND means the Child Nutrition Division of the Food and
Nutrition Service of the Department.
(f) FNS means the Food and Nutrition Service of the U.S. Department
of Agriculture.
(g) FNSRO means Food and Nutrition Services Regional Offices, of the
Food and Nutrition Service of the U.S. Department of Agriculture.
(h) Cost of milk means the net purchase price paid by the school or
child-care institution to the milk supplier for milk delivered to the
school or child-care institution. This shall not include any amount paid
to the milk supplier for servicing, rental of or installment purchase of
milk service equipment.
(i) Department means the U.S. Department of Agriculture.
(i-1) Disclosure means individual children's program eligibility
information obtained through the free milk eligibility process that is
revealed or used for a purpose other than for the purpose for which the
information was obtained. The term refers to access, release, or
transfer of personal data about children by means of print, tape,
microfilm, microfiche, electronic communication or any other means.
(j) Family means a group of related or nonrelated individuals, who
are not residents of an institution or boarding house, but who are
living as one economic unit.
(j-1) Free milk means milk for which neither the child nor any
member of his family pays or is required to work in the school or child-
care institution or in its food service.
(k) Fiscal year means the period of 12 calendar months beginning
October 1, 1977, and each October 1 of any calendar year thereafter and
ending September 30 of the following calendar year.
(k-1) Medicaid means the State medical assistance program under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(l) Milk means pasteurized fluid types of unflavored or flavored
whole milk, lowfat milk, skim milk, or cultured buttermilk which meet
State and local standards for such milk. In Alaska, Hawaii, American
Samoa, Guam, Puerto Rico, the Trust Territory of the Pacific Islands,
and the Virgin Islands, if a sufficient supply of such types of fluid
milk cannot be obtained, milk shall include reconstituted or recombined
milk. All milk should contain vitamins A and D at levels specified by
the Food and Drug Administration and consistent with State and local
standards for such milk.
(m) National School Lunch Program means the program under which
general cash-for-food assistance and special cash assistance are made
available to schools pursuant to part 210 of this chapter.
(n) Needy children means: (1) Children who attend schools
participating in the Program and who meet the School Food Authority's
eligibility standards
[[Page 70]]
for free milk approved by the State agency, or FNSRO where applicable,
under part 245 of this chapter; and (2) children who attend child-care
institutions participating in the Program and who meet the eligibility
standards for free milk approved by the State agency, or FNSRO where
applicable, under Sec. 215.13a of this part.
(o) [Reserved]
(p) Nonpricing program means a program which does not sell milk to
children. This shall include any such program in which children are
normally provided milk, along with food and other services, in a school
or child-care institution financed by a tuition, boarding, camping or
other fee, or by private donations or endowments.
(q) Nonprofit milk service means milk service maintained by or on
behalf of the school or child-care institution for the benefit of the
children, all of the income from which is used solely for the operation
or improvement of such milk service.
(r) Nonprofit means exempt from income tax under the Internal
Revenue Code, as amended.
(s) OA means the Office of Audit of the United States Department of
Agriculture.
(s-1) OIG means the Office of the Inspector General of the
Department.
(t) Pricing program means a program which sells milk to children.
This shall include any such program in which maximum use is made of
Program reimbursement payments in lowering, or reducing to ``zero,''
wherever possible, the price per half pint which children would normally
pay for milk.
(u) Program means the Special Milk Program for Children.
(u-1) Reimbursement means financial assistance paid or payable to
participating schools and child-care institutions for milk served to
eligible children.
(v) School means: (1) An educational unit of high school grade or
under, recognized as part of the educational system in the State and
operating under public or nonprofit private ownership in a single
building or complex of buildings; (2) any public or nonprofit private
classes of preprimary grade when they are conducted in the
aforementioned schools; (3) any public or nonprofit private residential
child care institution, or distinct part of such institution, which
operates principally for the care of children, and, if private, is
licensed to provide residential child care services under the
appropriate licensing code by the State or a subordinate level of
government, except for residential summer camps which participate in the
Summer Food Service Program for Children, Job Corps centers funded by
the Department of Labor, and private foster homes. The term residential
child care institutions includes, but is not limited to: Homes for the
mentally, emotionally or physically impaired, and unmarried mothers and
their infants; group homes; halfway houses; orphanages; temporary
shelters for abused children and for runaway children; long-term care
facilities for chronically ill children; and juvenile detention centers.
A long-term care facility is a hospital, skilled nursing facility,
intermediate care facility, or distinct part thereof, which is intended
for the care of children confined for 30 days or more; or (4) with
respect to the Commonwealth of Puerto Rico, nonprofit child care centers
certified as such by the Governor of Puerto Rico.
(w) School Breakfast Program means the program authorized by section
4 of the Child Nutrition Act of 1966, as amended.
(w-1) School Food Authority means the governing body which is
responsible for the administration of one or more schools and which has
the legal authority to operate a milk program therein. The term ``School
Food Authority'' also includes a nonprofit agency to which such
governing body has delegated authority for the operation of a milk
program in a school.
(x) School year means the period of 12 calendar months beginning
July 1, 1977, and each July 1 of any calendar year thereafter and ending
June 30 of the following calendar year.
(x-1) 7 CFR part 3015 means the Uniform Federal Assistance
Regulations published by the Department to implement OMB Circulars A-21,
A-87, A-102, A-110, and A-122; and Executive Order 12372. (For
availability of OMB Circulars referenced in this definition, see 5 CFR
1310.3.)
[[Page 71]]
(x-2) 7 CFR part 3017 means the Department's regulation to implement
Executive Order 12549, covering governmentwide rules on suspension and
debarment as well as The Drug Free Workplace Act of 1988.
(x-3) 7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
(x-4) 7 CFR part 3052 means the Department's regulations
implementing OMB Circular A-133, ``Audits of State, Local Governments,
and Non-Profit Organizations.'' (For availability of OMB Circulars
referenced in this definition, see 5 CFR 1310.3.)
(x-5) Split-session means an educational program operating for
approximately one-half of the normal school day.
(y) State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
(z) State agency means the State educational agency or any other
State agency that has been designated by the Governor or other
appropriate executive or legislative authority of the State and approved
by the Department to administer the Program.
(aa) State Children's Health Insurance Program (SCHIP) means the
State medical assistance program under title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.).
(bb) Summer Food Service Program for Children means the program
authorized by section 13 of the National School Lunch Act, as amended.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766;
sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760; sec. 10(d)),
Pub. L. 95-627, 92 Stat. 3624 (42 U.S.C. 1757); sec. 14, Pub. L. 95-627,
92 Stat. 3625-3626; sec. 205, Pub. L. 96-499, The Omnibus Reconciliation
Act of 1980, 94 Stat. 2599; secs. 807 and 808, Pub. L. 97-35, 95 Stat.
521-535 (42 U.S.C. 1772, 1784, 1760))
[32 FR 12587, Aug. 31, 1967]
Editorial Note: For Federal Register citations affecting Sec.
215.2, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 215.3 Administration.
(a) Within the Department, FNS shall act on behalf of the Department
in the administration of the Program. Within FNS, CND shall be
responsible for Program administration.
(b) Within the States, to the extent practicable and permissible
under State law, responsibility for the administration of the Program in
schools and child-care institutions shall be in the educational agency
of the State: Provided, however, That another State agency, upon request
by the Governor or other appropriate State executive or legislative
authority, may be approved to administer the Program in schools as
defined in Sec. 215.2(v)(3) or Sec. 215.2(v)(4) or in child-care
institutions.
(c) FNSRO shall administer the Program in any school as defined in
Sec. 215.2(v)(1), Sec. 215.2(v)(2) or Sec. 215.2(v)(3) or in any
child-care institution as defined in Sec. 215.2(e) wherein the State
agency is not permitted by law to disburse Federal funds paid to it
under the Program; Provided, however, That FNSRO shall also administer
the Program in all other schools and child-care institutions which have
been under continuous FNS administration since October 1, 1980 unless
the administration of such schools and institutions is assumed by a
State agency. References in this part to ``FNSRO where applicable'' are
to FNSRO as the agency administering the Program to schools or child-
care institutions within certain States.
(d) Each State agency desiring to take part in the Program shall
enter into a written agreement with the Department for the
administration of the Program in the State in accordance with the
provisions of this part. Such agreement shall cover the operation of the
Program during the period specified therein and may be extended at the
option of the Department.
(Secs. 804, 816 and 817, Pub. L. 97-35; 95 Stat. 521-535 (42 U.S.C.
1753, 1756, 1759, 1771 and 1785))
[Amdt. 14, 41 FR 31174, July 27, 1976, as amended by Amdt. 24, 47 FR
14133 Apr. 2, 1982; Amdt. 36, 54 FR 2989, Jan. 23, 1989]
[[Page 72]]
Sec. 215.4 Payments of funds to States and FNSROs.
(a) For each fiscal year, the Secretary shall make payments to each
State agency at such times as he may determine from the funds
appropriated for Program reimbursement. Subject to Sec. 215.11(c)(2),
the total of these payments for each State for any fiscal year shall be
limited to the amount of reimbursement payable to School Food
Authorities and child care institutions under Sec. 215.8 of this part
for the total number of half-pints of milk served under the Program to
eligible children from October 1 to September 30.
(b) Each State agency shall be responsible for controlling Program
reimbursement payments so as to keep within the funds made available to
it, and for the timely reporting to FNS of the number of half pints of
milk actually served. The Secretary shall increase or decrease the
available level of funding by adjusting the State agency's Letter of
Credit when appropriate.
(Pub. L. 97-370, 96 Stat. 1806)
[Amdt. 14, 41 FR 31174, July 27, 1976, as amended by Amdt. 30, 49 FR
18986, May 4, 1984]
Sec. 215.5 Method of payment to States.
(a) Funds to be paid to any State shall be made available by means
of Letters of Credit issued by FNS in favor of the State agency. The
State agency shall:
(1) Obtain funds needed to reimburse School Food Authorities and
child-care institutions through presentation by designated State
officials of a Payment Voucher on Letter of Credit (Treasury Form GFO
7578) in accordance with procedures prescribed by FNS and approved by
the U.S. Treasury Department; (2) submit requests for funds only at such
times and in such amounts as will permit prompt payment of claims; (3)
use the funds received from such requests without delay for the purpose
for which drawn. Notwithstanding the foregoing provisions, if funds are
made available by Congress for the operation of the Program under a
continuing resolution, Letters of Credit shall reflect only the amount
available for the effective period of the resolution.
(b) [Reserved]
(c) The State agency shall release to FNS any Federal funds made
available to it under the Program which are unobligated at the end of
each fiscal year. Release of funds by the State agency shall be made as
soon as practicable but in no event later than 30 days following demand
by FNSRO, and shall be reflected by a related adjustment in the State
agency's Letter of Credit.
[Amdt. 13, 39 FR 28416, Aug. 7, 1974, as amended by Amdt. 14, 41 FR
31174, July 27, 1976]
Sec. 215.6 Use of funds.
(a) Federal funds made available under the Program shall be used to
encourage the consumption of milk through reimbursement payments to
schools and child-care institutions in connection with the purchase and
service of milk to children in accordance with the provisions of this
part: Provided, however, That, with the approval of FNS, any State
agency, or FNSRO where applicable, may reserve for use in carrying out
special developmental projects an amount equal to not more than 1 per
centum of the Federal funds so made available for any fiscal year.
(b) Whoever embezzles, willfully misapplies, steals, or obtains by
fraud any funds, assets, or property provided under this part, whether
received directly or indirectly from the Department, shall: (1) If such
funds, assets, or property are of a value of $100 or more, be fined not
more than $25,000 or imprisoned not more than 5 years or both; or (2) if
such funds, assets, or property are of a value of less than $100, be
fined not more than $1,000 or imprisoned not more than one year or both.
(c) Whoever receives, conceals, or retains to his use or gain funds,
assets, or property provided under this part, whether received directly
or indirectly from the Department, knowing such funds, assets, or
property have been embezzled, willfully misapplied, stolen, or obtained
by fraud, shall be subject
[[Page 73]]
to the same penalties provided in paragraph (b) of this section.
(Sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760; sec.
10(d)(3), Pub. L. 95-627, 92 Stat. 3624 (42 U.S.C. 1757); sec. 14, Pub.
L. 95-627, 92 Stat. 3625-3626; 44 U.S.C. 3506))
[Amdt. 14, 41 FR 31174, July 27, 1976, as amended by Amdt. 18, 44 FR
37898, June 29, 1979; 47 FR 746, Jan. 7, 1982; 64 FR 50741, Sept. 20,
1999]
Sec. 215.7 Requirements for participation.
(a) Any school or nonprofit child care institution shall receive the
Special Milk Program upon request provided it does not participate in a
meal service program authorized under the Child Nutrition Act of 1966 or
the National School Lunch Act; except that schools with such meal
service may receive the Special Milk Program upon request only for the
children attending split-session kindergarten programs who do not have
access to the meal service. Each School Food Authority or child-care
institution shall make written application to the State agency, or FNSRO
where applicable, for any school or child-care institution in which it
desires to operate the Program, if such school or child-care institution
did not participate in the Program in the prior fiscal year.
(b) Any School Food Authority or child care institution
participating in the Program may elect to serve free milk to children
eligible for free meals. Upon application for the Program, each School
Food Authority or child care institution:
(1) Shall be required by the State agency, or FNSRO where
applicable, to state whether or not it wishes to provide free milk in
the schools or institutions participating under its jurisdiction and
(2) If it so wishes to provide free milk, shall also submit for
approval a free milk policy statement which, if for a school, shall be
in accordance with part 245 of this chapter or, if for a child care
institution, shall be in accordance with Sec. 215.13a of this part.
(c) The application shall include information in sufficient detail
to enable the State agency, or FNSRO where applicable, to determine
whether the School Food Authority or child-care institution is eligible
to participate in the Program and extent of the need for Program
payments.
(d) Each school food authority or child care institution approved to
participate in the program shall enter into a written agreement with the
State agency or FNSRO, as applicable, that may be amended as necessary.
Nothing in the preceding sentence shall be construed to limit the
ability of the State agency to suspend or terminate the agreement in
accordance with Sec. 215.15. If a single State agency administers any
combination of the Child Nutrition Programs, that State agency shall
provide each SFA with a single agreement with respect to the operation
of those programs. Such agreement shall provide that the School Food
Authority or child-care institution shall, with respect to participating
schools and child-care institutions under its jurisdiction:
(1) Operate a nonprofit milk service. However, school food
authorities may use facilities, equipment, and personnel supported with
funds provided to a school food authority under this part to support a
nonprofit nutrition program for the elderly, including a program funded
under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.).
(2) If electing to provide free milk (i) serve milk free to all
eligible children, at times that milk is made available to nonneedy
children under the Program; and (ii) make no discrimination against any
needy child because of his inability to pay for the milk.
(3) Comply with the requirements of the Department's regulations
respecting nondiscrimination (7 CFR part 15);
(4) Claim reimbursement only for milk as defined in this part and in
accordance with the provisions of Sec. 215.8 and Sec. 215.10;
(5) Submit Claims for Reimbursement in accordance with Sec. 215.10
of this part and procedures established by the State agency or FNSRO
where applicable;
(6) Maintain a financial management system as prescribed by the
State agency, or FNSRO where applicable;
(7) Upon request, make all records pertaining to its milk program
available to the State agency and to FNS or OA for audit and
administrative review, at any reasonable time and place.
[[Page 74]]
Such records shall be retained for a period of three years after the end
of the fiscal year to which they pertain, except that, if audit findings
have not been resolved, the records shall be retained beyond the three-
year period as long as required for the resolution of the issues raised
by the audit;
(8) Retain the individual applications for free milk submitted by
families for a period of three years after the end of the fiscal year to
which they pertain, except that, if audit findings have not been
resolved, the records shall be retained beyond the three-year period as
long as required for the resolution of the issues raised by the audit.
(e) State requirements. Nothing contained in this part shall prevent
a State agency from imposing additional requirements for participation
in the Program which are not inconsistent with the provision of this
part.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766);
sec. 5, Pub. L. 95-627, 92 Stat. 3619 (42 U.S.C. 1772); secs. 801, 803,
812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753, 1759(a), 1773,
1758); 44 U.S.C. 3506)
[Amdt. 13, 39 FR 28416, Aug. 7, 1974, as amended by Amdt. 14, 41 FR
31174, July 27, 1976; Amdt. 16, 43 FR 1059, Jan. 6, 1978; 44 FR 10700,
Feb. 23, 1979; Amdt. 17, 44 FR 33047, June 8, 1979; 46 FR 51635, Oct.
20, 1981; 47 FR 745, Jan. 7, 1982; Amdt. 30, 49 FR 18986, 18987, May 4,
1984; 52 FR 7562, Mar. 12, 1987; 52 FR 15298, Apr. 28, 1987; 64 FR
50741, Sept. 20, 1999]
Sec. 215.8 Reimbursement payments.
(a) [Reserved]
(b)(1) The rate of reimbursement per half-pint of milk purchased and
(i) served in nonpricing programs to all children; (ii) served to all
children in pricing programs by institutions and School Food Authorities
not electing to provide free milk; and (iii) served to children other
than needy children in pricing programs by institutions and School Food
Authorities electing to provide free milk shall be the rate announced by
the Secretary for the applicable school year. However, in no event shall
the reimbursement for each half-pint (236 ml.) of milk served to
children exceed the cost of the milk to the school or child care
institution.
(2) The rate of reimbursement for milk purchased and served free to
needy children in pricing programs by institutions and School Food
Authorities electing to provide free milk shall be the average cost of
milk, i.e., the total cost of all milk purchased during the claim
period, divided by the total number of purchased half-pints.
(c) Schools and child-care institutions having pricing programs
shall use the reimbursement payments received to reduce the price of
milk to children.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766);
sec. 5, Pub. L. 95-627, 92 Stat. 3619 (42 U.S.C. 1772); Omnibus
Reconciliation Act of 1980, sec. 209, Pub. L. 96-499, 94 Stat. 2599;
secs. 807 and 808, Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1772,
1784, 1760; secs. 805 and 819, Pub. L. 97-35, 95 Stat. 521-535 (42
U.S.C. 1773))
[Amdt. 13, 39 FR 28416, Aug. 7, 1974, as amended by Amdt. 16, 43 FR
1060, Jan. 6, 1978; 44 FR 10700, Feb. 23, 1979; Amdt. 17, 44 FR 33047,
June 8, 1979; 46 FR 51365, Oct. 20, 1981; Amdt. 23, 47 FR 14134, Apr. 2,
1982]
Sec. 215.9 Effective date for reimbursement.
(a) A State Agency, or FNSRO where applicable, may grant written
approval to begin operations under the Program prior to the receipt of
the application from the School Food Authority or child-care
institution. Such written approval shall be attached to the subsequently
filed application, and the agreement executed by the School Food
Authority or child-care institution shall be effective from the date
upon which the School Food Authority or child-care institution was
authorized to begin operations: Provided, however, That such effective
date shall not be earlier than the calendar month preceding the calendar
month in which the agreement is executed by the State Agency or by the
Department.
(b) Reimbursement payments pursuant to Sec. 215.8 shall be made for
milk purchased and served to children at any time during the effective
period of an agreement between a School Food Authority or child care
institution and the State agency or the Department.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766))
[32 FR 12587, Aug. 31, 1967, as amended by Amdt. 5, 37 FR 14686, July
22, 1972; Amdt. 13, 39 FR 28417, Aug. 7, 1974; Amdt. 16, 43 FR 1060,
Jan. 6, 1978; 44 FR 10700, Feb. 23, 1979]
[[Page 75]]
Sec. 215.10 Reimbursement procedures.
(a) To be entitled to reimbursement under this part, each School
Food Authority shall submit to the State agency, or FNSRO where
applicable, a monthly Claim for Reimbursement.
(b) Claims for Reimbursement shall include data in sufficient detail
to justify the reimbursement claimed and to enable the State agency to
provide the Reports of School Program Operations required under Sec.
215.11(c)(2). Unless otherwise approved by FNS, the Claim for
Reimbursement for any month shall include only milk served in that month
except if the first or last month of Program operations for any year
contains 10 operating days or less, such month may be added to the Claim
for Reimbursement for the appropriate adjacent month; however, Claims
for Reimbursement may not combine operations occurring in two fiscal
years. If a single State agency administers any combination of the Child
Nutrition Programs, the SFA shall be able to use a common claim form
with respect to claims for reimbursement for meals served under those
programs. A final Claim for Reimbursement shall be postmarked and/or
submitted to the State agency, or FNSRO where applicable, not later than
60 days following the last day of the full month covered by the claim.
State agencies may establish shorter deadlines at their discretion.
Claims not postmarked and/or submitted within 60 days shall not be paid
with Program funds unless FNS determines that an exception should be
granted. The State agency, or FNSRO where applicable, shall promptly
take corrective action with respect to any Claim for Reimbursement as
determined necessary through its claim review process or otherwise. In
taking such corrective action, State agencies may make upward
adjustments in Program funds claimed on claims filed within the 60 day
deadline if such adjustments are completed within 90 days of the last
day of the claim month and are reflected in the final Report of School
Program Operations (FNS-10) for the claim month which is required under
Sec. 215.11(c)(2). Upward adjustments in Program funds claimed which
are not reflected in the final FNS-10 for the claim month shall not be
made unless authorized by FNS. Downward adjustments in Program funds
claimed shall always be made, without FNS authorization, regardless of
when it is determined that such adjustments are necessary.
(c) [Reserved]
(d) In submitting a Claim for Reimbursement, each School Food
Authority or child-care institution shall certify that the claim is true
and correct; that records are available to support the claim; that the
claim is in accordance with the existing agreement; and that payment
therefor has not been received.
(e) Milk served to adults is not eligible for reimbursement.
(f) Any School Food Authority or child care institution which
operates both a nonpricing and pricing milk program in the same school
or child care institution, may elect to claim reimbursement for:
(1) All milk purchased and served to children under the Program at
the nonpricing rate prescribed in Sec. 215.8(b) (1), or (2) only milk
purchased and served to children in the pricing program at the rates
prescribed in Sec. 215.8(b) (1) and (2) for pricing programs.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766);
Pub. L. 97-370, 96 Stat. 1806)
[Amdt. 13, 39 FR 28417, Aug. 7, 1974, as amended by Amdt. 14, 41 FR
31175, July 27, 1976; Amdt. 16, 43 FR 1060, Jan. 6, 1978; 44 FR 10700,
Feb. 23, 1979; 45 FR 82622, Dec. 16, 1980; 48 FR 20896, May 10, 1983;
Amdt. 30, 49 FR 18986, May 4, 1984; 64 FR 50742, Sept. 20, 1999]
Sec. 215.11 Special responsibilities of State agencies.
(a) [Reserved]
(b) Program assistance. Each State agency, or FNSRO where
applicable, shall provide Program assistance, as follows:
(1) Consultive, technical, and managerial personnel to administer
the Program and monitor performance of schools and child-care
institutions and to measure progress toward achieving Program goals.
(2) Visits to participating schools and child-care institutions to
ensure compliance with Program regulations and with the Department's
nondiscrimination regulations (part 15 of this title),
[[Page 76]]
issued under title VI of the Civil Rights Act of 1964. State agencies
shall conduct reviews of schools participating in the Program for
compliance with the provisions of this part when such schools are being
reviewed under the provisions identified under Sec. 210.18(i) of this
title. Compliance reviews of participating schools shall focus on the
reviewed school's compliance with the required certification, counting
and milk service procedures. School food authorities may appeal a denial
of all or a part of the Claim for Reimbursement or withholding of
payment arising from review activity conducted by the State agency under
Sec. 210.18 of this title or by FNS under Sec. 210.30(d)(2) of this
title. Any such appeal shall be subject to the procedures set forth
under Sec. 210.18(q) of this title or Sec. 210.30(d)(3) of this title,
as appropriate.
(3) Documentation of such Program assistance shall be maintained on
file by the State agency, or FNSRO where applicable.
(c) Records and reports. (1) Each State agency shall maintain
Program records as necessary to support the reimbursement payments made
to child care institutions or School Food Authorities under Sec. 215.8
and Sec. 215.10 and the reports submitted to FNS under Sec.
215.11(c)(2). The records may be kept in their original form or on
microfilm, and shall be retained for a period of three years after the
date of submission of the final Financial Status Report for the fiscal
year, except that if audit findings have not been resolved, the records
shall be retained beyond the three-year period as long as required for
the resolution of the issues raised by the audit.
(2) Each State agency shall submit to FNS a final Report of School
Program Operations (FNS-10) for each month which shall be limited to
claims submitted in accordance with Sec. 215.10(b) and which shall be
postmarked and/or submitted no later than 90 days following the last day
of the month covered by the report. States shall not receive Program
funds for any month for which the final report is not submitted within
this time limit unless FNS grants an exception. Upward adjustments to a
State agency's report shall not be made after 90 days from the month
covered by the report unless authorized by FNS. Downward adjustments
shall always be made, without FNS authorization, regardless of when it
is determined that such adjustments are necessary. Adjustments shall be
reported to FNS in accordance with procedures established by FNS. Each
State agency shall also submit to FNS a quarterly Financial Status
Report (SF-269) on the use of Program funds. Such reports shall be
postmarked and/or submitted no later than 30 days after the end of each
fiscal year quarter. Obligations shall be reported only for the fiscal
year in which they occur. A final Financial Status Report for each
fiscal year shall be postmarked and/or submitted to FNS within 120 days
after the end of the fiscal year. FNS shall not be responsible for
reimbursing unpaid program obligations reported later than 120 days
after the close of the fiscal year in which they were incurred.
(d) Compliance. State agencies, or FNSROs where applicable, shall
require School Food Authorities and child-care institutions to comply
with applicable provisions of this part.
(e) Investigations. Each State Agency shall promptly investigate
complaints received or irregularities noted in connection with the
operation of the Program and shall take appropriate action to correct
any irregularities. State Agencies shall maintain on file evidence of
such investigations and actions. The Office of Investigation of the
Department (OI) shall make investigations at the request of the State
Agency or if CND or FNSRO determines investigations by OI are
appropriate.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766); 44
U.S.C. 3506; sec. 812, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C.
1759a))
[32 FR 12587, Aug. 31, 1967, as amended by Amdt. 13, 39 FR 28417, Aug.
7, 1974; Amdt. 14, 41 FR 31175, July 27, 1976; 47 FR 745, Jan. 7, 1982;
Amdt. 25, 47 FR 18564, Apr. 30, 1982; Amdt. 30, 49 FR 18987, May 4,
1984; 56 FR 32949, July 17, 1991; 57 FR 38586, Aug. 26, 1992]
Sec. 215.12 Claims against schools or child-care institutions.
(a) State agencies, or FNSROs where applicable, shall disallow any
portion of a claim and recover any payment made to a School Food
Authority or
[[Page 77]]
child-care institution that was not properly payable under this part.
State agencies will use their own procedures to disallow claims and
recover overpayments already made.
(b) [Reserved]
(c) The State Agency may refer any matter in connection with this
section to FNSRO and CND for determination of the action to be taken.
(d) Each State agency shall maintain all records pertaining to
action taken under this section. Such records shall be retained for a
period of three years after the date of the submission of the final
Financial Status Report, except that, if audit findings have not been
resolved, the records shall be retained beyond the three-year period as
long as required for the resolution of the issues raised by the audit.
(e) If CND does not concur with the State Agency action in paying a
claim or a reclaim, or in failing to collect an overpayment FNSRO shall
assert a claim against the State Agency for the amount of such claim,
reclaim or overpayment. In all such cases, the State Agency shall have
full opportunity to submit to CND evidence or information concerning the
action taken. If in the determination of CND, the State Agency's action
was unwarranted, the State Agency shall promptly pay to FNS the amount
of the claim, reclaim, or overpayment.
(f) The amounts recovered by the State Agency from schools and
child-care institutions may be utilized, first, to make reimbursement
payments for milk served during the fiscal year for which the funds were
initially available, and second, to repay any State funds expended in
the reimbursement of claims under the program and not otherwise repaid.
Any amounts recovered which are not so utilized shall be returned to FNS
in accordance with the requirements of Sec. 215.5(c).
(g) With respect to schools or child-care institutions in which
FNSRO administers the Program, when FNSRO disallows a claim or a portion
of a claim, or makes a demand for refund of an alleged overpayment, it
shall notify the School Food Authority or child-care institutions of the
reasons for such disallowance or demand and the School Food Authority or
child-care institutions shall have full opportunity to submit evidence
or to file reclaim for any amount disallowed or demanded in the same
manner afforded in this section to schools or child-care institutions
administered by State Agencies.
(h) The Secretary shall have the authority to determine the amount
of, to settle, and to adjust any claims arising under the Program, and
to compromise or deny such claim or any part thereof. The Secretary
shall also have the authority to waive such claims if the Secretary
determines that to do so would serve the purposes of the Program. This
provision shall not diminish the authority of the Attorney General of
the United States under section 516 of Title 28, U.S. Code, to conduct
litigation on behalf of the United States.
(47 FR 745, Jan. 7, 1982 (44 U.S.C. 3506; secs. 804, 816 and 817, Pub.
L. 97-35; 95 Stat. 521-535 (42 U.S.C. 1753, 1756, 1759, 1771 and 1785))
[32 FR 12587, Aug. 31, 1967, as amended by Amdt. 5, 37 FR 14686, July
22, 1972; Amdt. 13, 39 FR 28418, Aug. 7, 1974; Amdt. 14, 41 FR 31175,
July 27, 1976; 47 FR 745, Jan. 7, 1982; Amdt. 24, 47 FR 14133, Apr. 2,
1982]
Sec. 215.13 Management evaluations and audits.
(a) State agencies and school food authorities shall comply with the
requirements of part 3015 of this title concerning the audit
requirements for recipients and subrecipients of the Department's
financial assistance.
(b) These requirements call for organization-wide financial and
compliance audits to ascertain whether financial operations are
conducted properly; financial statements are presented fairly;
recipients and subrecipients comply with the laws and regulations that
affect the expenditures of Federal funds; recipients and subrecipients
have established procedures to meet the objectives of federally assisted
programs; and recipients and subrecipients are providing accurate and
reliable information concerning grant funds. States and school food
authorities shall use their own procedures to arrange for and prescribe
the scope of independent audits, provided that such audits comply with
the requirements set forth in part 3015 of this title.
[[Page 78]]
(c) Each State agency shall provide FNS with full opportunity to
conduct management evaluations (including visits to schools and child-
care institutions) of any operations of the State agency under the
Program and shall provide OA with full opportunity to conduct audits
(including visits to schools and child-care institutions) of all
operations of the State agency under the Program. Each State agency
shall make available its records, including records of the receipt and
expenditure of funds under the Program, upon a reasonable request by FNS
or OA. OA shall also have the right to make audits of the records and
operations of any school or child-care institution.
(d) In conducting management evaluations, reviews or audits for any
fiscal year, the State agency, FNS, or OIG may disregard any overpayment
if the total overpayment does not exceed $600 or, in the case of State
agency claims in State administered Programs, it does not exceed the
amount established under State law, regulations or procedure as a
minimum amount for which claim will be made for State losses but not to
exceed $600. However, no overpayment is to be disregarded where there is
substantial evidence of violations of criminal law or civil fraud
statutes.
(Secs. 805 and 819, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1773);
sec. 812, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1759a))
[Amdt. 14, 41 FR 31175, July 27, 1976, as amended at 43 FR 58925, Dec.
22, 1978; Amdt. 23, 47 FR 14135, Apr. 2, 1982; Amdt. 25, 47 FR 18564,
Apr. 30, 1982; Amdt. 36, 54 FR 2990, Jan. 23, 1989; 57 FR 38586, Aug.
26, 1992; 59 FR 1894, Jan. 13, 1994; 64 FR 50742, Sept. 20, 1999]
Sec. 215.13a Determining eligibility for free milk in child-care
institutions.
(a) General. Child care institutions which operate pricing programs
may elect to make free milk available, as set forth in Sec.
215.7(d)(2), to children who meet the approved eligibility criteria.
Such child care institutions shall determine the children who are
eligible for free milk and assure that there is no physical segregation
of, or other discrimination against, or overt identification of,
children unable to pay the full price for milk.
(b) Action by State agencies and FNSROs. Each State agency, or FNSRO
where applicable, upon application for the program by a child care
institution operating a pricing program, and annually thereafter, shall
require the institution to state whether or not it wishes to serve free
milk to eligible children at times that milk is provided under the
Program. It shall annually require each child care institution electing
to provide free milk to submit a free milk policy statement and shall
provide such institutions with a prototype free milk policy statement
and a copy of the State's family-size income standards for determining
eligibility for free meals and milk under the National School Lunch and
School Breakfast Programs to assist the institutions in meeting its
responsibilities.
(c) Action by institutions. Each child care institution which
operates a pricing program shall inform the State agency, or FNSRO where
applicable, at the time it applies for Program participation and at
least annually thereafter, whether or not it wishes to provide free
milk. Institutions electing to provide free milk shall annually submit a
written free milk policy statement for determining free milk eligibility
of children under their jurisdiction, which shall contain the items
specified in paragraph (d) of this section. Such institutions shall not
be approved for Program participation of their agreements renewed unless
the free milk policy has been reviewed and approved. Pending approval or
a revision of a policy statement, the existing policy shall remain in
effect.
(d) Policy statement. A free milk policy statement as required in
paragraph (c) of this section shall contain the following:
(1) The specific criteria to be used in determining eligibility for
free milk. These criteria shall give consideration to economic need as
reflected by family size and income. The criteria used by the child-care
institution may not result in the eligibility of children from families
whose incomes exceed the State's family-size income standards for
determining eligibility for free meals under the National School Lunch
and School Breakfast Programs.
[[Page 79]]
(2) The method by which the child-care institution will collect
information from families in order to determine a child's eligibility
for free milk.
(3) The method by which the child-care institution will collect milk
payments so as to prevent the overt identification of children receiving
free milk.
(4) A hearing procedure substantially like that outlined in part 245
of this chapter.
(5) An assurance that there will be no discrimination against free
milk recipients and no discrimination against any child on the basis of
race, color, or national origin.
(e) Public announcement of eligibility criteria. Each child care
institution which elects to make free milk available under the Program
shall annually make a public announcement of the availability of free
milk to children who meet the approved eligibility criteria to the
information media serving the area from which its attendance is drawn.
The public announcement must also state that milk is available to all
children in attendance without regard to race, color, or national
origin.
(f) Is a Privacy Act notice required on the free milk application?
Each free milk application must include substantially the following
statement: ``Unless you include your child's case number for the Food
Stamp Program, the Food Distribution Program on Indian Reservations (or
other identifier for the Food Distribution Program on Indian
Reservations) or the Temporary Assistance for Needy Families Program,
you must include the social security number of the adult household
member signing the application or indicate that the household member
does not have a social security number. This is required by section 9 of
the National School Lunch Act. The social security number is not
mandatory, but the application cannot be approved if a social security
number is not given or an indication is not made that the signer does
not have a social security number. The social security number will be
used in the administration and enforcement of the program.''
(g) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP)
Program eligibility information about children eligible for free milk
may be disclosed to Medicaid and SCHIP as described in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow child care
institutions to disclose children's free milk eligibility information to
Medicaid and SCHIP. Child care institutions may then elect to do so.
Children's program eligibility information may only be disclosed to
Medicaid or SCHIP when both the State agency and the child care
institution so elect, the parent/guardian does not decline to have their
eligibility information disclosed as described in paragraph (g)(5), and
the requirements in this paragraph (g) are met.
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or child care institution, as appropriate, may disclose
children's names, eligibility status (whether they are eligible for free
milk), and any other eligibility information obtained through the free
milk application or obtained through direct certification to persons
directly connected with the administration of Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration of
Medicaid and SCHIP for purposes of disclosure of children's free milk
eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free milk eligibility information? Medicaid and SCHIP
agencies and health insurance program operators receiving children's
free milk eligibility information may only use the information to seek
to enroll children in Medicaid or SCHIP. The Medicaid and SCHIP
enrollment process may include targeting and identifying children from
low-income households who are potentially eligible for Medicaid or SCHIP
for the purpose of seeking to enroll them in Medicaid or SCHIP.
[[Page 80]]
(5) Must we notify households of potential disclosure to Medicaid or
SCHIP? The State agency or child care institution, as appropriate, must
notify parents/guardians that their children's free milk eligibility
information will be disclosed to Medicaid and/or SCHIP unless the
parent/guardian elects not to have their information disclosed.
Additionally, the State agency or sponsor, as appropriate, must give
parents/guardians an opportunity to elect not to have their information
disclosed to Medicaid or SCHIP. Only the parent or guardian who is a
member of the household or family for purposes of the free and reduced
price meal or free milk application may decline the disclosure of
eligibility information. The notification must inform parents/guardians
that they are not required to consent to the disclosure, that the
information, if disclosed, will be used to identify children eligible
for and to seek to enroll children in a health insurance program, and
that their decision will not affect their children's eligibility for
free milk. The notification may be included in the letter/notice to
parents/guardians that accompanies the free milk application, on the
application itself or in a separate notice provided to parents/
guardians. The notice must give parents/guardians adequate time to
respond. For children determined eligible through direct certification,
the notice of potential disclosure may be included in the document
informing parents/guardians of their children's eligibility for free
milk through direct certification.
(6) May social security numbers be disclosed? The State agency or
child care institution, as appropriate, may disclose social security
numbers to any programs or persons authorized to receive all program
eligibility information under this paragraph (g), provided parents/
guardians have not declined to have their information disclosed. However
State agencies and child care institutions that plan to disclose social
security numbers must give notice of the planned use of the social
security numbers. This notice must be in accordance with section 7(b) of
the Privacy Act of 1974 (5 U.S.C. 552a note). The application must
include substantially the following language for disclosures of social
security numbers to Medicaid or SCHIP: ``The social security number may
also be disclosed to Medicaid and the State Children's Health Insurance
Program for the purpose of identifying and seeking to enroll eligible
children in one of these health insurance programs.'' This language is
in addition to the notice required in paragraph (f) of this section.
State agencies and child care institutions are responsible for drafting
the appropriate notice for disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or child care institution, as appropriate,
must have a written agreement with the State or local agency or agencies
administering Medicaid or SCHIP prior to disclosing children's free milk
eligibility information. At a minimum, the agreement must:
(i) Identify the health insurance program or health agency receiving
children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or child care institution, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (g) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure
[[Page 81]]
of children's free milk eligibility information to Medicaid or SCHIP, as
provided in this paragraph (g), must ensure that any child care
institution acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free milk eligibility information to seek to enroll children in those
health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766);
sec. 5, Pub. L. 95-627, 92 Stat. 3619 (42 U.S.C. 1772))
[Amdt. 14, 41 FR 31176, July 27, 1976, as amended by Amdt. 16, 43 FR
1060, Jan. 6, 1978; 44 FR 10700, Feb. 23, 1979; Amdt. 17, 44 FR 33047,
June 8, 1979; 66 FR 2201, Jan. 11, 2001]
Sec. 215.14 Nondiscrimination.
The Department's regulations on nondiscrimination in federally
assisted programs are set forth in part 15 of this title. The
Department's agreements with State agencies, the State agencies'
agreements with School Food Authorities and child-care institutions and
the FNSRO agreements with School Food Authorities administering
nonprofit private schools and with child-care institutions shall contain
the assurances required by such regulations. When different types of
milk are served to children, (a) a uniform price for each type of milk
served shall be charged to all non-needy children in the school or
child-care institution who purchase milk, and (b) needy children shall
be given the opportunity to select any type of milk offered.
(44 U.S.C. 3506)
[Amdt. 13, 39 FR 28418, Aug. 7, 1974, as amended at 47 FR 745, Jan. 7,
1982]
Sec. 215.14a Procurement standards.
(a) Requirements. State agencies and School Food Authorities shall
comply with the requirements of the Office of Management and Budget
(OMB) Circular A-102 and the Department's Uniform Federal Assistance
Regulations, 7 CFR part 3015, subpart S (46 FR 55658) concerning the
procurement of supplies, food, equipment and other services with Program
funds. These requirements are adopted by FNS to ensure that such
materials and services are obtained for the Program efficiently and
economically and in compliance with applicable laws and executive
orders.
(b) Contractual responsibilities. The standards contained in OMB
Circular A-102 and 7 CFR part 3015, do not relieve the State agency or
School Food Authority of any contractual responsibilities under its
contract. The State agency or School Food Authority is the responsible
authority, without recourse to FNS, regarding the settlement and
satisfaction of all contractual and administrative issues arising out of
procurements entered into in connection with the Program. This includes
but is not limited to: Source evaluation, protests, disputes, claims, or
other matters of a contractual nature. Matters concerning violation of
law are to be referred to the local, State or Federal authority that has
proper jurisdiction.
(c) Procurement procedure. The State agency or School Food Authority
may use their own procurement procedures which reflect applicable State
and local laws and regulations, provided that procurements made with
Program funds adhere to the standards set forth in OMB Circular A-102
and 7 CFR part 3015.
(Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80 Stat.
885-890 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C. 1759))
[Amdt. 27, 48 FR 19355, Apr. 29, 1983]
Sec. 215.15 Suspension, termination and grant closeout procedures.
Whenever it is determined that a State agency has materially failed
to comply with the provisions of this
[[Page 82]]
part, or with FNS guidelines and instructions, FNS may suspend or
terminate the Program in whole, or in part, or take any other action as
may be available and appropriate. A State agency may also terminate the
Program by mutual agreement with FNS. FNS and the State agency shall
comply with the provisions of the Department's Uniform Federal
Assistance Regulations, 7 CFR part 3015, subpart N concerning grant
suspension, termination and closeout procedures. Furthermore, the State
agency, or FNSRO where applicable, shall apply these provisions to
suspension or termination of the Program in School Food Authorities.
[Amdt. 30, 49 FR 18987, May 4, 1984]
Sec. 215.16 Program information.
School Food Authorities and child-care institutions desiring
information concerning the Program should write to their State
educational agency, or the appropriate Food and Nutrition Service
Regional Office of FNS as indicated below:
(a) In the States of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, and Vermont: Northeast Regional
Office, FNS, U.S. Department of Agriculture, 10 Causeway Street, Room
501, Boston, Massachusetts 02222-1065.
(b) In the States of Delaware, District of Columbia, Maryland, New
Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands, and West
Virginia: Mid-Atlantic Regional Office, FNS, U.S. Department of
Agriculture, 300 Corporate Boulevard, Robbinsville, New Jersey 08691-
1598.
(c) In the States of Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina, and Tennessee: Southeast
Regional Office, FNS, U.S. Department of Agriculture, 61 Forsyth Street
SW., Room 8T36, Atlanta, Georgia 30303.
(d) In the States of Illinois, Indiana, Michigan, Minnesota, Ohio,
and Wisconsin: Midwest Regional Office, FNS, U.S. Department of
Agriculture, 77 West Jackson Boulevard, 20th Floor, Chicago, Illinois
60604-3507.
(e) In the States of Arkansas, Louisiana, New Mexico, Oklahoma,
Texas: Southwest Regional Office, Food and Nutrition Service, U.S.
Department of Agriculture, 1100 Commerce Street, Room 5-C-30, Dallas,
Texas 75242.
(f) In the States of Alaska, American Samoa, Arizona, California,
Guam, Hawaii, Idaho, Nevada, Oregon, The Commonwealth of the Northern
Mariana Islands, and Washington: Western Regional Office, FNS, U.S.
Department of Agriculture, 550 Kearny Street, Room 400, San Francisco,
California 94108.
(g) In the States of Colorado, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah, and Wyoming: Mountain Plains
Regional Office, FNS, U.S. Department of Agriculture, 1244 Speer
Boulevard, Suite 903, Denver, Colorado 80204.
(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766);
sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760); sec.
10(d)(3), Pub. L. 95-627, 92 Stat. 3624 (42 U.S.C. 1757); sec. 14, Pub.
L. 95-627, 92 Stat. 3625-3626); secs. 804, 816, 817 and 819, Pub. L. 97-
35, 95 Stat. 521-535 (42 U.S.C. 1753, 1756, 1759, 1771, 1773 and 1785)
[Amdt. 14, 41 FR 31178, July 27, 1976, as amended by Amdt. 18, 44 FR
37898, June 29, 1979; Amdt. 27, 48 FR 195, Jan. 4, 1983; Amdt. 36, 54 FR
2990, Jan. 23, 1989; 65 FR 12435, Mar. 9, 2000]
Sec. 215.17 Information collection/recordkeeping--OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control
number
------------------------------------------------------------------------
215.3(d)................................................... 0584-0327
215.5(a)................................................... 0584-0005
0584-0002
215.5(c)................................................... 0584-0341
215.7 (a), (c)............................................. 0584-0005
215.7 (b)(2)............................................... 0584-0026
215.7(d)................................................... 0584-0329
0584-0005
215.10 (a), (b), (d)....................................... 0584-0005
0584-0284
215.11 (b), (c)(1), (e).................................... 0584-0005
215.11(c)(2)............................................... 0584-0002
0584-0341
215.12 (a), (d), (e), (g).................................. 0584-0005
215.13(a).................................................. 0584-0005
215.13a(a)-(e)............................................. 0584-0026
215.14..................................................... 0584-0005
215.14a(a)-(c)............................................. 0584-0005
215.15..................................................... 0584-0005
------------------------------------------------------------------------
[50 FR 53258, Dec. 31, 1985]
[[Page 83]]
PART 220_SCHOOL BREAKFAST PROGRAM--Table of Contents
Sec.
220.1 General purpose and scope.
220.2 Definitions.
220.3 Administration.
220.4 Payment of funds to States and FNSROs.
220.5 Method of payment to States.
220.6 Use of funds.
220.7 Requirements for participation.
220.8 What are the nutrition standards and menu planning approaches for
breakfasts?
220.9 Reimbursement payments.
220.10 Effective date for reimbursement.
220.11 Reimbursement procedures.
220.12 Competitive food services.
220.13 Special responsibilities of State agencies.
220.14 Claims against school food authorities.
220.15 Management evaluations and audits.
220.16 Procurement standards.
220.17 Prohibitions.
220.18 Suspension, termination and grant closeout procedures.
220.19 Free and reduced price breakfasts.
220.20 Program information.
220.21 Information collection/recordkeeping--OMB assigned control
numbers.
Appendix A to Part 220--Alternate Foods for Meals
Appendix B to Part 220--Categories of Foods of Minimal Nutritional Value
Appendix C to Part 220--Child Nutrition (CN) Labeling Program
Authority: 42 U.S.C. 1773, 1779, unless otherwise noted.
Sec. 220.1 General purpose and scope.
This part announces the policies and prescribes the regulations
necessary to carry out the provisions of section 4 of the Child
Nutrition Act of 1966, as amended, which authorizes payments to the
States to assist them to initiate, maintain, or expand nonprofit
breakfast programs in schools.
[Amdt. 25, 41 FR 34758, Aug. 17, 1976]
Sec. 220.2 Definitions.
For the purpose of this part the term:
(a) Act means the Child Nutrition Act of 1966, as amended.
(b) Breakfast means a meal which meets the nutritional requirements
set out in Sec. 220.8, and which is served to a child in the morning
hours. The meal shall be served at or close to the beginning of the
child's day at school.
(c) Child means: (1) A student of high school grade or under as
determined by the State educational agency, who is enrolled in an
educational unit of high school grade or under as described in
paragraphs (1) and (2) of the definition of ``School'', including
students who are mentally or physically disabled as defined by the State
and who are participating in a school program established for the
mentally or physically disabled; or (2) a person under 21 chronological
years of age who is enrolled in an institution or center as described in
paragraphs (3) and (4) of the definition of ``School''.
(c-1) Competitive foods means any foods sold in competition with the
School Breakfast Program to children in food service areas during the
breakfast period.
(d) CND means the Child Nutrition Division of the Food and Nutrition
Service of the Department.
(e) Department means the U.S. Department of Agriculture.
(f) Distributing agency means a State, Federal, or private agency
which enters into an agreement with the Department for the distribution
of commodities pursuant to part 250 of this chapter.
(g) Fiscal year means the period of 15 calendar months beginning
July 1, 1976, and ending September 30, 1977; and the period of 12
calendar months beginning October 1, 1977, and each October 1 of any
calendar year thereafter and ending September 30 of the following
calendar year.
(h) FNS means the Food and Nutrition Service of the Department.
(i) FNSRO means the appropriate Food and Nutrition Service Regional
Office of the Food and Nutrition Service of the Department.
(i-1) Foods of minimal nutritional value means: (1) In the case of
artificially sweetened foods, a food which provides less than five
percent of the Reference Daily Intake (RDI) for each of eight specified
nutrients per serving; (2) in the case of all other foods, a food that
provides less than five percent of the RDI for each of eight specified
nutrients per 100 calories and less than five percent of the RDI for
each of eight specified nutrients per serving. The eight nutrients to be
assessed for this
[[Page 84]]
purpose are: Protein, vitamin A, vitamin C, niacin, riboflavin, thiamin,
calcium and iron. Categories of foods of minimal nutritional value are
listed in appendix B of this part.
(j) Free breakfast means a breakfast for which neither the child nor
any member of his family pays or is required to work in the school or in
the school's food service.
(k) Infant cereal means any iron fortified dry cereal especially
formulated and generally recognized as cereal for infants that is
routinely mixed with breast milk or iron-fortified infant formula prior
to consumption.
(l) Infant formula means any iron-fortified infant formula intended
for dietary use solely as a food for normal healthy infants excluding
those formulas specifically formulated for infants with inborn errors of
metabolism or digestive or absorptive problems. Infant formula, as
served, must be in liquid state at recommended dilution.
(m) Menu item means, under Nutrient Standard Menu Planning or
Assisted Nutrient Standard Menu Planning, any single food or combination
of foods. All menu items or foods offered as part of the reimbursable
meal may be considered as contributing towards meeting the nutrition
standards provided in Sec. 220.8, except for those foods that are
considered as foods of minimal nutritional value as provided for in
Sec. 220.2(i-1) which are not offered as part of a menu item in a
reimbursable meal. For the purposes of a reimbursable breakfast, a
minimum of three menu items must be offered, one of which shall be fluid
milk served as a beverage or on cereal or both; under offer versus
serve, a student may decline only one menu item.
(n) Milk means pasteurized fluid types of unflavored or flavored
whole milk, lowfat milk, skim milk, or cultured buttermilk which meet
State and local standards for such milk except that, in the meal pattern
for infants (0 to 1 year of age), milk means breast milk or iron-
fortified infant formula. In Alaska, Hawaii, American Samoa, Guam,
Puerto Rico, the Trust Territory of the Pacific Islands, and the Virgin
Islands, if a sufficient supply of such types of fluid milk cannot be
obtained, ``milk'' shall include reconstituted or recombined milk. All
milk should contain vitamins A and D at levels specified by the Food and
Drug Administration and consistent with State and local standards for
such milk.
(o) National School Lunch Program means the Program authorized by
the National School Lunch Act.
(o-1) Net cash resources means all monies as determined in
accordance with the State agency's established accounting system, that
are available to or have accrued to a School Food Authority's nonprofit
school food service at any given time, less cash payable. Such monies
may include but are not limited to, cash on hand, cash receivable,
earnings or investments, cash on deposit and the value of stocks, bonds
or other negotiable securities.
(o-2) Nonprofit school food service means all food service
operations conducted by the School Food Authority principally for the
benefit of school children, all of the revenue from which is used solely
for the operation or improvement of such food service.
(p) Nonprofit when applied to schools or institutions eligible for
the Program means exempt from income tax under section 501(c)(3) of the
Internal Revenue Code of 1954, as amended; or in the Commonwealth of
Puerto Rico, certified by the Governor.
(p-1) Nutrient Standard Menu Planning/Assisted Nutrient Standard
Menu Planning means ways to develop breakfast menus based on the
analysis for nutrients in the menu items and foods offered over a school
week to determine if specific levels for a set of key nutrients and
calories were met in accordance with Sec. 220.8(e)(5). However, for the
purposes of Assisted Nutrient Standard Menu Planning, breakfast menu
planning and analysis are completed by other entities and must
incorporate the production quantities needed to accommodate the specific
service requirements of a particular school or school food authority in
accordance with Sec. 220.8(f).
(q) OA means the Office of Audit of the Department.
(q-1) OI means the Office of Investigation of the Department.
(q-2) OIG means the Office of the Inspector General of the
Department.
[[Page 85]]
(r) Program means the School Breakfast Program.
(s) Reduced price breakfast means a breakfast which meets all of the
following criteria: (1) The price shall be less than the full price of
the breakfast, (2) the price shall be 30 cents or lower, and (3) neither
the child nor any member of his family shall be required to supply an
equivalent value in work for the school or the school's food service.
(t) Reimbursement means financial assistance paid or payable to
participating schools for breakfasts meeting the requirements of Sec.
220.8 served to eligible children at rates assigned by the State agency,
or FNSRO where applicable. The term ``reimbursement'' also includes
financial assistance made available through advances to School Food
Authorities.
(t-1) Revenue when applied to nonprofit school food service means
all monies received by or accruing to the nonprofit school food service
in accordance with the State agency's established accounting system
including, but not limited to, children's payments, earnings on
investments, other local revenues, State revenues, and Federal cash
reimbursements.
(u) School means: (1) An educational unit of high school grade or
under, recognized as part of the educational system in the State and
operating under public or nonprofit private ownership in a single
building or complex of buildings; (2) any public or nonprofit private
classes of preprimary grade when they are conducted in the
aforementioned schools; or (3) any public or nonprofit private
residential child care institution, or distinct part of such
institution, which operates principally for the care of children, and,
if private, is licensed to provide residential child care services under
the appropriate licensing code by the State or a subordinate level of
government, except for residential summer camps which participate in the
Summer Food Service Program for Children, Job Corps centers funded by
the Department of Labor, and private foster homes. The term
``residential child care institutions'' includes, but is not limited to:
Homes for the mentally, emotionally or physically impaired, and
unmarried mothers and their infants; group homes; halfway houses;
orphanages; temporary shelters for abused children and for runaway
children; long-term care facilities for chronically ill children; and
juvenile detention centers. A long-term care facility is a hospital,
skilled nursing facility, intermediate care facility, or distinct part
thereof, which is entended for the care of children confined for 30 days
or more.
(v) School Breakfast Program means the program authorized by section
4 of the Child Nutrition Act of 1966.
(v-1) School in severe need means a school determined to be eligible
for rates of reimbursement in excess of the prescribed National Average
Payment Factors, based upon the criteria set forth in Sec. 220.9(e).
(w) School Food Authority means the governing body which is
responsible for the administration of one or more schools and which has
legal authority to operate a breakfast program therein.
(w-1) School week means the period of time used to determine
compliance with the nutrition standards and the appropriate calorie and
nutrient levels in Sec. 220.8. Further, if applicable, school week is
the basis for conducting Nutrient Standard Menu Planning or Assisted
Nutrient Standard Menu Planning for breakfasts as provided in Sec.
220.8(e) and Sec. 220.8(f). The period shall be a normal school week of
five consecutive days; however, to accommodate shortened weeks resulting
from holidays and other scheduling needs, the period shall be a minimum
of three consecutive days and a maximum of seven consecutive days. Weeks
in which school breakfasts are offered less than three times shall be
combined with either the previous or the coming week.
(x) Secretary means the Secretary of Agriculture.
(x-1) 7 CFR part 3015 means the Uniform Federal Assistance
Regulations published by the Department to implement OMB Circulars A-21,
A-87, A-102, A-110, and A-122; and Executive Order 12372. (For
availability of OMB Circulars referenced in this definition, see 5 CFR
1310.3.)
(x-2) 7 CFR part 3017 means the Department's regulation to implement
[[Page 86]]
Executive Order 12549, covering governmentwide rules on suspension and
debarment as well as The Drug Free Workplace Act of 1988.
(x-3) 7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
(x-4) 7 CFR part 3052 means the Department's regulations
implementing A-133, ``Audits of State, Local Governments, and Non-Profit
Organizations.'' (For availability of OMB Circulars referenced in this
definition, see 5 CFR 1310.3.)
(y) State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
(z) State agency means: (1) The State educational agency or (2) such
other agency of the State as has been designated by the Governor or
other appropriate executive or legislative authority of the State and
approved by the Department to administer the Program in schools as
defined in Sec. 220.2(u)(3) of this part.
(aa) State educational agency means, as the State legislature may
determine: (1) The chief State school officer (such as the State
Superintendent of Public Instruction, Commissioner of Education, or
similar officer), or (2) a board of education controlling the State
department of education.
(bb) Yogurt means commercially prepared coagulated milk products
obtained by the fermentation of specific bacteria, that meet milk fat or
milk solid requirements and to which flavoring foods or ingredients may
be added. These products are covered by the Food and Drug
Administration's Definition and Standard of Identity for yogurt, lowfat
yogurt, and nonfat yogurt, 21 CFR 131.200, 21 CFR 131.203, and 21 CFR
131.206, respectively.
(Sec. 6, Pub. L. 95-627, 92 Stat. 3620 (42 U.S.C. 1760); sec. 205, Pub.
L. 96-499, The Omnibus Reconciliation Act of 1980, 94 Stat. 2599; secs.
801, 803, 812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753, 1759(a),
1773, 1758; secs. 807 and 808, Pub. L. 97-35, 95 Stat. 521-535, 42
U.S.C. 1772, 1784, 1760; sec. 819, Pub. L. 97-35; 95 Stat. 533 (42
U.S.C. 1759a, 1773 and 1757))
[Amdt. 25, 41 FR 34758, Aug. 17, 1976]
Editorial Note: For Federal Register citations affecting Sec.
220.2, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 220.3 Administration.
(a) Within the Department, FNS shall act on behalf of the Department
in the administration of the Program covered by this part. Within FNS,
CND shall be responsible for administration of the Program.
(b) Within the States, responsibility for the administration of the
Program in schools as defined in Sec. 220.2(u)(1), (u)(2) and (u)(4)
shall be in the State educational agency, except that FNSRO shall
administer the Program with respect to nonprofit private schools as
defined in Sec. 220.2(u)(1) of any State wherein the State educational
agency is not permitted by law to disburse Federal funds paid to it
under the Program; Provided, however, That FNSRO shall also administer
the Program in all other nonprofit private schools which have been under
continuous FNS administration since October 1, 1980, unless the
administration of such private schools is assumed by a State agency.
(c) Within the States, responsibility for the administration of the
Program in schools as defined in Sec. 220.2(u)(3) shall be in the State
educational agency, or if the State educational agency cannot administer
the Program in such schools, such other agency of the State as has been
designated by the Governor or other appropriate executive or legislative
authority of the State and approved by the Department to administer the
Program in such schools: Provided, however, That FNSRO shall administer
the Program in such schools if the State agency is not permitted by law
to disburse Federal funds paid to it
[[Page 87]]
under the Program to such schools; and Provided, further, That FNSRO
shall also administer the Program in all other such schools which have
been under continuous FNS administration since October 1, 1980, unless
the administration of such schools is assumed by a State agency.
(d) References in this part to ``FNSRO where applicable'' are to
FNSRO as the agency administering the Program.
(e) Each State agency desiring to take part in any of the programs
shall enter into a written agreement with the Department for the
administration of the Program in the State in accordance with the
provisions of this part. Such agreement shall cover the operation of the
Program during the period specified therein and may be extended at the
option of the Department.
(Sec. 804, 816 and 817, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753,
1756, 1759, 1771 and 1785); 44 U.S.C. 3506)
[Amdt. 25, 41 FR 34759, Aug. 17, 1976, as amended at 47 FR 745, Jan. 7,
1982; Amdt. 42, 47 FR 14133, Apr. 2, 1982; Amdt. 56, 54 FR 2990, Jan.
23, 1989]
Sec. 220.4 Payment of funds to States and FNSROs.
(a) To the extent funds are available, the Secretary shall make
breakfast assistance payments to each State agency for breakfasts served
to children under the Program. Subject to Sec. 220.13(b)(2), the total
of these payments for each State for any fiscal year shall be limited to
the total amount of reimbursement payable to eligible schools within the
State under this part for the fiscal year.
(b) The Secretary shall prescribe by July 1 of each fiscal year
annual adjustments to the nearest one-fourth cent in the national
average per breakfast factors for all breakfasts and for free and
reduced price breakfasts, that shall reflect changes in the cost of
operating a breakfast program.
(c) In addition to the funds made available under paragraph (a) of
this section, funds shall be made available to the State agencies, and
FNSROs where applicable, in such amounts as are needed to finance
reimbursement rates assigned in accordance with the provisions of Sec.
220.9(c).
(Secs. 801, 803, 812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753,
1759(a), 1773, 1758); Pub. L. 97-370, 96 Stat. 1806)
[38 FR 35554, Dec. 28, 1973, as amended at 40 FR 30923, July 24, 1975;
46 FR 51367, Oct. 20, 1981; 48 FR 20896, May 10, 1983; Amdt. 49, 49 FR
18987, May 4, 1984]
Sec. 220.5 Method of payment to States.
Funds to be paid to any State for the School Breakfast Program shall
be made available by means of Letters of Credit issued by FNS in favor
of the State agency. The State agency shall:
(a) Obtain funds needed for reimbursement to School Food Authorities
through presentation by designated State officials of a payment Voucher
on Letter of Credit in accordance with procedures prescribed by FNS and
approved by the U.S. Treasury Department; (b) submit requests for funds
only at such times and in such amounts, as will permit prompt payment of
claims or authorized advances; and (c) use the funds received from such
requests without delay for the purpose for which drawn.
[Amdt. 25, 41 FR 34759, Aug. 17, 1976]
Sec. 220.6 Use of funds.
(a) Federal funds made available under the School Breakfast Program
shall be used by State agencies, or FNSROs where applicable, to
reimburse or make advance payments to School Food Authorities in
connection with breakfasts served in accordance with the provisions of
this part. However, with the approval of FNS, any State agency, or FNSRO
where applicable, may reserve for use in carrying out special
developmental projects an amount up to 1 per centum of the funds earned
in any fiscal year under the School Breakfast Program. Advance payments
to School Food Authorities may be made at such times and in such amounts
as are necessary to meet current obligations.
(b) Whoever embezzles, willfully misapplies, steals, or obtains by
fraud any funds, assets, or property provided under this part, whether
received directly or indirectly from the Department, shall--
[[Page 88]]
(1) If such funds, assets, or property are of a value of $100 or
more, be fined not more than $25,000 or imprisoned not more than 5 years
or both; or
(2) If such funds, assets, or property are of a value of less than
$100, be fined not more than $1,000 or imprisoned not more than one year
or both.
(c) Whoever receives, conceals, or retains to his use or gain funds,
assets, or property provided under this part, whether received directly
or indirectly from the Department, knowing such funds, assets, or
property have been embezzled, willfully misapplied, stolen, or obtained
by fraud, shall be subject to the same penalties provided in paragraph
(b) of this section.
(Sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760); sec.
10(d)(3), Pub. L. 95-627, 92 Stat. 3624 (42 U.S.C. 1757); sec. 14, Pub.
L. 95-627, 92 Stat. 3625-3626)
[40 FR 30923, July 24, 1975, as amended by Amdt. 25, 41 FR 34759, Aug.
17, 1976; Amdt. 28, 44 FR 37899, June 29, 1979; 64 FR 50742, Sept. 20,
1999]
Sec. 220.7 Requirements for participation.
(a) The School Food Authority shall make written application to the
State agency, or FNSRO where applicable, for any school in which it
desires to operate the School Breakfast Program, if such school did not
participate in the Program in the prior fiscal year. The School Food
Authority shall also submit for approval, either with the application or
at the request of the State agency, or FNSRO where applicable, a free
and reduced price policy statement in accordance with part 245 of this
chapter. A School Food Authority which simultaneously makes application
for the National School Lunch Program and the School Breakfast Program
shall submit one free and reduced price policy statement which shall
provide that the terms, conditions, and eligibility criteria set forth
in such policy statement shall apply to the service of free and reduced
price lunches and to the service of free and reduced price breakfasts.
If, at the time application is made for the School Breakfast Program, a
School Food Authority has an approved free and reduced price policy
statement on file with the State agency, or FNSRO where applicable, for
the National School Lunch Program, it need only confirm in writing that
such approved policy statement will also apply to the operation of its
School Breakfast Program. Applications for the School Breakfast Program
shall not be approved in the absence of an approved free and reduced
price policy statement.
(1) A school which also either participates in the National School
Lunch Program or only receives donations of commodities for its
nonprofit lunch program under the provisions of part 250 of this chapter
(commodity only school) shall apply the same set of eligibility criteria
so that children who are eligible for free lunches shall also be
eligible for free breakfasts and children who are eligible for reduced
price lunches shall also be eligible for reduced price breakfasts.
(2) Schools shall obtain a minimum of two food safety inspections
per school year conducted by a State or local governmental agency
responsible for food safety inspections. Schools participating in more
than one child nutrition program shall only be required to obtain a
minimum of two food safety inspections per school year if the food
preparation and service for all meal programs take place at the same
facility. Schools shall post in a publicly visible location a report of
the most recent inspection conducted, and provide a copy of the
inspection report to a member of the public upon request.
(b) Applications shall solicit information in sufficient detail to
enable the State agency to determine whether the School Food Authority
is eligible to participate in the Program and extent of the need for
Program payments.
(c) Within the funds available to them, State agencies, or FNSRO's
where applicable, shall approve for participation in the School
Breakfast Program any school making application and agreeing to carry
out the program in accordance with this part. State agencies, or FNSRO's
where applicable, have a positive obligation, however, to extend the
benefits of the School Breakfast Program to children attending schools
in areas where poor economic conditions exist.
[[Page 89]]
(d) Any School Food Authority may employ a food service management
company (or other nonprofit agency or nonprofit organization) in the
conduct of its feeding operation in one or more of its schools. A School
Food Authority that employs a food service management company shall
remain responsible for seeing that the feeding operation is in
conformance with its agreement with the State Agency or the FNS Regional
Office. The contract between the School Food Authority and the food
service management company shall expressly provide that:
(1) The food service management company shall maintain such records
(supported by invoices, receipts, or other evidence) as the School Food
Authority will need to meet its responsibilities under this part, and
shall report thereon to the School Food Authority promptly at the end of
each month;
(2) Any federally donated commodities received by the School Food
Authority and made available to the food service management company
shall enure only to the benefit to the School Food Authority's nonprofit
school food service and be utilized therein; and
(3) The books and records of the food service management company
pertaining to the School Food Authority's feeding operation shall be
available for a period of 3 years from the date of the submission of the
final Financial Status Report, for inspection and audit by
representatives of the State agency, of the Department, and of the
General Accounting Office at any reasonable time and place, except that
if audit findings have not been resolved, the records shall be retained
beyond the three-year period as long as required for the resolution of
the issues raised by the audit.
(e) Each school food authority approved to participate in the
program shall enter into a written agreement with the State agency or
the Department through the FNSRO, as applicable, that may be amended as
necessary. Nothing in the preceding sentence shall be construed to limit
the ability of the State agency or the FNSRO to suspend or terminate the
agreement in accordance with Sec. 220.18. If a single State agency
administers any combination of the Child Nutrition Programs, that State
agency shall provide each SFA with a single agreement with respect to
the operation of those programs. Such agreements shall provide that the
School Food Authority shall, with respect to participating schools under
its jurisdiction:
(1)(i) Maintain a nonprofit school food service; (ii) in accordance
with the financial management system established under Sec. 220.13(i)
of this part, use all revenues received by such food service only for
the operation or improvement of that food service Except that,
facilities, equipment, and personnel support with funds provided to a
school food authority under this part may be used to support a nonprofit
nutrition program for the elderly, including a program funded under the
Older Americans Act of 1965 (42 U.S.C. 3001 et seq.); (iii) revenues
received by the nonprofit school food service shall not be used to
purchase land or buildings or to contruct buildings; (iv) limit its net
cash resources to an amount that does not exceed three months average
expenditure for its nonprofit school food service or such other amount
as may be approved by the State agency; and (v) observe the limitations
on any competitive food service as set forth in Sec. 220.12 of this
part;
(2) Serve breakfasts which meet the minimum requirements prescribed
in Sec. 220.8, during a period designated as the breakfast period by
the school;
(3) Price the breakfast as a unit;
(4) Supply breakfast without cost or at reduced price to all
children who are determined by the School Food Authority to be unable to
pay the full price thereof in accordance with the free and reduced price
policy statements approved under part 245 of this chapter;
(5) Make no discrimination against any child because of his
inability to pay the full price of the breakfasts;
(6) Claim reimbursement at the assigned rates only for breakfasts
served in accordance with the agreement;
(7) Submit Claims for Reimbursement in accordance with Sec. 220.11
of this part and procedures established by the State agency, or FNSRO
where applicable;
[[Page 90]]
(8) Maintain, in the storage, preparation and service of food,
proper sanitation and health standards in conformance with all
applicable State and local laws and regulations, and comply with the
food safety inspection requirement in paragraph (a)(2) of this section;
(9) Purchase, in as large quantities as may be efficiently utilized
in its nonprofit school food service, foods designated as plentiful by
the State Agency, or CFPDO, where applicable;
(10) Accept and use, in as large quantities as may be efficiently
utilized in its nonprofit school food service, such foods as may be
offered as a donation by the Department;
(11) Maintain necessary facilities for storing, preparing, and
serving food;
(12) Maintain a financial management system as prescribed by the
State agency, or FNSRO where applicable;
(13) Upon request, make all accounts and records pertaining to its
nonprofit school food service available to the State agency, to FNS and
to OA for audit or review at a reasonable time and place. Such records
shall be retained for a period of three years after the end of the
fiscal year to which they pertain, except that if audit findings have
not been resolved, the records shall be retained beyond the three-year
period as long as required for the resolution of the issues raised by
the audit;
(14) Retain the individual application for free and reduced price
breakfasts submitted by families for a period of three years after the
end of the fiscal year to which they pertain; and
(15) Comply with the requirements of the Department's regulations
respecting nondiscrimination (7 CFR part 15).
(f) Nothing contained in this part shall prevent the State Agency
from imposing additional requirements for participation in the program
which are not inconsistent with the provisions of this part.
(44 U.S.C. 3506; sec. 819, Pub. L. 97-35, 95 Stat. 533 (42 U.S.C. 1759a,
1773 and 1757); Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L.
89-647, 80 Stat. 885-890 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207
(42 U.S.C. 1759))
[32 FR 34, Jan. 5, 1967]
Editorial Note: For Federal Register citations affecting Sec.
220.7, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 220.8 What are the nutrition standards and menu planning
approaches for breakfasts?
(a) What are the nutrition standards for breakfasts for children age
2 and over? School food authorities must ensure that participating
schools provide nutritious and well-balanced breakfasts. For children
age 2 and over, breakfasts, when averaged over a school week, must meet
the nutrition standards and the appropriate nutrient and calorie levels
in this section. The nutrition standards are:
(1) Provision of one-fourth of the Recommended Dietary Allowances
(RDA) for protein, calcium, iron, vitamin A and vitamin C in the
appropriate levels (see paragraphs (b), (c), (e)(1), or (h) of this
section);
(2) Provision of the breakfast energy allowances (calories) for
children in the appropriate levels (see paragraphs (b), (c), (e)(1), or
(h) of this section);
(3) These applicable recommendations of the 1995 Dietary Guidelines
for Americans:
(i) Eat a variety of foods;
(ii) Limit total fat to 30 percent of total calories;
(iii) Limit saturated fat to less than 10 percent of total calories;
(iv) Choose a diet low in cholesterol;
(v) Choose a diet with plenty of grain products, vegetables, and
fruits; and
(vi) Choose a diet moderate in salt and sodium.
(4) These measures of compliance with the applicable recommendations
of the 1995 Dietary Guidelines for Americans:
(i) Limit the percent of calories from total fat to 30 percent of
the actual number of calories offered;
(ii) Limit the percent of calories from saturated fat to less than
10 percent of the actual number of calories offered;
(iii) Reduce sodium and cholesterol levels; and
(iv) Increase the level of dietary fiber.
(5) School food authorities have several ways to plan menus. The
minimum levels of nutrients and calories that breakfasts must offer
depends on the menu planning approach used and the
[[Page 91]]
age/grades served. The menu planning approaches are:
(i) Nutrient standard menu planning (see paragraphs (b) and (e) of
this section);
(ii) Assisted nutrient standard menu planning (see paragraphs (b)
and (f) of this section);
(iii) Traditional food-based menu planning (see paragraphs (c) and
(g)(1) of this section);
(iv) Enhanced food-based menu planning (see paragraphs (c) and
(g)(2) of this section); or
(v) Alternate menu planning as provided for in paragraph (h) of this
section.
(6) Schools must keep production and menu records for the breakfasts
they produce. These records must show how the breakfasts contribute to
the required food components, food items or menu items every day. In
addition, these records must show how the breakfasts contribute to the
nutrition standards in paragraph (a) of this section and the appropriate
calorie and nutrient levels (see paragraphs (c), (d) or (h) of this
section, depending on the menu planning approach used) over the school
week. If applicable, schools or school food authorities must maintain
nutritional analysis records to demonstrate that breakfasts, when
averaged over each school week, meet:
(i) The nutrition standards provided in paragraph (a) of this
section; and
(ii) The nutrient and calorie levels for children for each age or
grade group in accordance with paragraphs (b), (e)(1) of this section or
developed under paragraph (h) of this section.
(b) What are the levels for nutrients and calories for breakfasts
planned under the nutrient standard or assisted nutrient standard menu
planning approaches? (1) The required levels are:
[GRAPHIC] [TIFF OMITTED] TR09MY00.007
(2) Optional levels are:
[[Page 92]]
[GRAPHIC] [TIFF OMITTED] TR09MY00.008
(3) Schools may also develop a set of nutrient and calorie levels
for a school week. These levels are customized for the age groups of the
children in the particular school.
(c) What are the nutrient and calorie levels for breakfasts planned
under the food-based menu planning approaches?--(1) Traditional
approach. For the traditional food-based menu planning approach, the
required levels are:
[GRAPHIC] [TIFF OMITTED] TR09MY00.009
(2) Enhanced approach. For the enhanced food-based menu planning
approach, the required levels are:
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[GRAPHIC] [TIFF OMITTED] TR09MY00.010
(d) What exceptions and variations are allowed in reimbursable
breakfasts?--(1) Exceptions for medical or special dietary needs.
Schools must make substitutions in breakfasts for students who are
considered to have a disability under 7 CFR Part 15b and whose
disability restricts their diet. Schools may also make substitutions for
students who do not have a disability but who cannot consume the regular
breakfast because of medical or other special dietary needs.
Substitutions must be made on a case by case basis only when supported
by a statement of the need for substitutions that includes recommended
alternate foods, unless otherwise exempted by FNS. Such statement must,
in the case of a student with a disability, be signed by a physician or,
in the case of a student who is not disabled, by a recognized medical
authority.
(2) Variations for ethnic, religious, or economic reasons. Schools
should consider ethnic and religious preferences when planning and
preparing breakfasts. Variations on an experimental or continuing basis
in the food components for the food-based menu planning approaches in
paragraph (g) may be allowed by FNS. Any variations must be
nutritionally sound and needed to meet ethnic, religious, or economic
needs.
(3) Exceptions for natural disasters. If there is a natural disaster
or other catastrophe, FNS may temporarily allow schools to serve
breakfasts for reimbursement that do not meet the requirements in this
section.
(e) What are the requirements for the nutrient standard menu
planning approach?
(1) Nutrient levels.--(i) Adjusting nutrient levels for young
children. Schools with children who are age 2 must at least meet the
nutrition standards in paragraph (a) of this section and the preschool
nutrient and calorie levels in paragraph (b)(1) of this section over a
school week. Schools may also use the preschool nutrient and calorie
levels in paragraph (b)(2) of this section or may calculate nutrient and
calorie levels for two year olds. FNS has a method for calculating these
levels in menu planning guidance materials.
(ii) Minimum levels for nutrients. Breakfasts must at least offer
the nutrient and calorie levels for the required grade groups in the
table in paragraph (b)(1) of this section. Schools may also offer
breakfasts meeting the nutrient and calorie levels for the age groups in
paragraph (b)(2) of this section. If only one grade or age group is
outside the established levels, schools may follow the levels for the
majority of the children. Schools may also customize the nutrient and
calorie levels for the children they serve. FNS has a method for
calculating these levels in guidance materials for menu planning.
(2) Reimbursable breakfasts.--(i) Contents of a reimbursable
breakfast. A reimbursable breakfast must include at least three menu
items. All menu items or foods offered in a reimbursable breakfast
contribute to the nutrition standards in paragraph (a) of this
[[Page 94]]
section and to the levels of nutrients and calories that must be met in
paragraphs (c) or (e)(1) of this section. Unless offered as part of a
menu item in a reimbursable breakfast, foods of minimal nutritional
value (see appendix B to part 220) are not included in the nutrient
analysis. Reimbursable breakfasts planned under the nutrient standard
menu planning approach must meet the nutrition standards in paragraph
(a) of this section and the appropriate nutrient and calorie levels in
paragraph (b) or (e)(1) of this section.
(ii) Offer versus serve. Schools must offer at least three menu
items. At their option, school food authorities may allow students to
select only two menu items and to decline a maximum of one menu item.
The price of a reimbursable breakfast does not change if the student
does not take a menu item or requests smaller portions.
(3) Doing the analysis. Schools using nutrient standard menu
planning must conduct the analysis on all menu items and foods offered
in a reimbursable breakfast. The analysis is conducted over a school
week. Unless offered as part of a menu item in a reimbursable breakfast,
foods of minimal nutritional value (see appendix B to part 220) are not
included in the nutrient analysis.
(4) Software elements.--(i) The Child Nutrition Database. The
nutrient analysis is based on the Child Nutrition Database. This
database is part of the software used to do a nutrient analysis.
Software companies or others developing systems for schools may contact
FNS for more information about the database.
(ii) Software evaluation. FNS or an FNS designee evaluates any
nutrient analysis software before it may be used in schools. FNS or its
designee determines if the software, as submitted, meets the minimum
requirements. The approval of software does not mean that FNS or USDA
endorses it. The software must be able to do all functions after the
basic data is entered. The required functions include weighted averages
and the optional combined analysis of the lunch and breakfast programs.
(5) Nutrient analysis procedures.--(i) Weighted averages. Schools
must include all menu items and foods offered in reimbursable breakfasts
in the nutrient analysis. Menu items and foods are included based on the
portion sizes and projected serving amounts. They are also weighted
based on their proportionate contribution to the breakfasts offered.
This means that menu items or foods more frequently offered are weighted
more heavily than those not offered as frequently. Schools calculate
weighting as indicated by FNS guidance and by the guidance provided by
the software. Through September 30, 2009, schools are not required to
conduct a weighted analysis.
(ii) Analyzed nutrients. The analysis includes all menu items and
foods offered over a school week. The analysis must determine the levels
of: Calories, protein, vitamin A, vitamin C, iron, calcium, total fat,
saturated fat, sodium, cholesterol and dietary fiber.
(iii) Combining the analysis of the lunch and breakfast programs. At
their option, schools may combine the analysis of breakfasts offered
under this part and lunches offered under part 210 of this chapter. The
analysis is done proportionately to the levels of participation in each
program based on FNS guidance.
(6) Comparing the results of the nutrient analysis. Once the
procedures in paragraph (i)(5) of this section are completed, schools
must compare the results of the analysis to the appropriate nutrient and
calorie levels, by age/grade groups, in paragraph (b) of this section or
those developed under paragraph (e)(1) of this section. This comparison
determines the school week's average. Schools must also make comparisons
to the nutrition standards in paragraph (a) of this section to determine
how well they are meeting the nutrition standards over the school week.
(7) Adjustments to the menus. Once schools know the results of the
nutrient analysis based on the procedures in paragraphs (e)(5) and
(e)(6) of this section, they must adjust future menu cycles to reflect
production and how often the menu items and foods are offered. Schools
may need to reanalyze menus when the students' selections and,
consequently, production levels change. Schools may need to change the
menu items and foods offered given
[[Page 95]]
the students' selections and may need to modify the recipes and other
specifications to make sure that the nutrition standards in paragraph
(a) and either paragraph (b) or (e)(1) of this section are met.
(8) Standardized recipes. If a school follows the nutrient standard
menu planning approach, it must develop and follow standardized recipes.
A standardized recipe is a recipe that was tested to provide an
established yield and quantity using the same ingredients for both
measurement and preparation methods. Any standardized recipes developed
by USDA/FNS are in the Child Nutrition Database. If a school has its own
recipes, they must be standardized and analyzed to determine the levels
of calories, nutrients, and dietary components listed in paragraph
(e)(5)(ii) of this section. Schools must add any local recipes to their
local database as outlined in FNS guidance.
(9) Processed foods. The Child Nutrition Database includes a number
of processed foods. Schools may use purchased processed foods and menu
items that are not in the Child Nutrition Database. Schools or the State
agency must add any locally purchased processed foods and menu items to
their local database as outlined in FNS guidance. Schools or State
agencies must obtain the levels of calories, nutrients, and dietary
components listed in paragraph (e)(5)(ii) of this section.
(10) Menu substitutions. Schools may need to substitute foods or
menu items in a menu that was already analyzed. If the substitution(s)
occurs more than two weeks before the planned menu is served, the school
must reanalyze the revised menu. If the substitution(s) occurs two weeks
or less before the planned menu is served, the school does not need to
do a reanalysis. However, schools should always try to substitute
similar foods.
(11) Meeting the nutrition standards. The school's analysis shows
whether their menus are meeting the nutrition standards in paragraph (a)
of this section and the appropriate levels of nutrients and calories in
paragraph (b) of this section or customized levels developed under
paragraph (e)(1) of this section. If the analysis shows that the menu(s)
are not meeting these standards, the school needs to take action to make
sure that the breakfasts meet the nutrition standards and the calorie,
nutrient, and dietary component levels. Actions may include technical
assistance and training and may be taken by the State agency, the school
food authority or by the school as needed.
(12) Other Child Nutrition Programs and nutrient standard analysis
menu planning. School food authorities that operate the Summer Food
Service Program (part 225 of this chapter) and/or the Child and Adult
Care Food Program (part 226 of this chapter) may, with State agency
approval, prepare breakfasts for these programs using the nutrient
standard menu planning approach for children age two and over. FNS has
guidance on the levels of nutrient and calories for adult breakfasts
offered under the Child and Adult Care Food Program.
(f) What are the requirements for the assisted nutrient standard
menu planning approach?--(1) Definition of assisted nutrient standard
menu planning. Some school food authorities may not be able to do all of
the procedures necessary for nutrient standard menu planning. The
assisted nutrient standard menu planning approach provides schools with
menu cycles developed and analyzed by other sources. These sources
include the State agency, other schools, consultants, or food service
management companies.
(2) Elements of assisted nutrient standard menu planning. School
food authorities using menu cycles developed under assisted nutrient
standard menu planning must follow the procedures in paragraphs (e)(1)
through (e)(10) of this section. The menu cycles must also incorporate
local food preferences and accommodate local food service operations.
The menu cycles must meet the nutrition standards in paragraph (a) of
this section and meet the applicable nutrient and calorie levels for
nutrient standard menu planning in paragraphs (b) or (e)(1) of this
section. The supplier of the assisted nutrient standard menu planning
approach must also develop and provide recipes, food product
specifications, and preparation techniques. All of these components
support the nutrient analysis results of the menu
[[Page 96]]
cycles used by the receiving school food authorities.
(3) State agency approval. Prior to its use, the State agency must
approve the initial menu cycle, recipes and other specifications of the
assisted nutrient standard menu planning approach. The State agency
needs to make sure all the steps required for nutrient analysis were
followed. School food authorities may also ask the State agency for
assistance with implementation of their assisted nutrient standard menu
planning approach.
(4) Required adjustments. After the initial service of the menu
cycle developed under the assisted nutrient standard menu planning
approach, the nutrient analysis must be reassessed and appropriate
adjustments made as discussed in paragraph (e)(7) of this section.
(5) Final responsibility for meeting the nutrition standards. The
school food authority using the assisted nutrient standard menu planning
approach retains final responsibility for meeting the nutrition
standards in paragraph (a) of this section and the applicable calorie
and nutrient levels in paragraphs (b) or (e)(1) of this section.
(6) Adjustments to the menus. If the nutrient analysis shows that
the breakfasts offered are not meeting the nutrition standards in
paragraph (a) of this section and the applicable calorie and nutrient
levels in paragraphs (b) or (e)(1) of this section, the State agency,
school food authority or school must take action to make sure the
breakfasts offered meet these requirements. Actions needed include
technical assistance and training.
(7) Other Child Nutrition Programs and assisted nutrient analysis
menu planning. School food authorities that operate the Summer Food
Service Program (part 225 of this chapter) and/or the Child and Adult
Care Food Program (part 226 of this chapter) may, with State agency
approval, prepare breakfasts for these programs using the assisted
nutrient standard menu planning approach for children age two and over.
FNS has guidance on the levels of nutrients and calories for adult
breakfasts offered under the Child and Adult Care Food Program.
(g) What are the requirements for the food-based menu planning
approaches?--(1) Food items. There are two menu planning approaches
based on meal patterns, not nutrient analysis. These approaches are the
traditional food-based menu planning approach and the enhanced food-
based menu planning approach. Schools using one of these approaches must
offer these food items in at least the portions required for various
age/grade groups:
(i) A serving of fluid milk as a beverage or on cereal or used
partly for both;
(ii) A serving of fruit or vegetable or both, or full-strength fruit
or vegetable juice; and
(iii) Two servings from one of the following components or one
serving from each component:
(A) Grains/breads; and/or
(B) Meat/meat alternate.
(2) Quantities for the traditional food-based menu planning
approach. At a minimum, schools must offer the food items in the
quantities specified for the appropriate age/grade group in the
following table:
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[GRAPHIC] [TIFF OMITTED] TR09MY00.011
(3) Quantities for the enhanced food-based menu planning approach.
At a minimum, schools must offer the food items in the quantities
specified for the appropriate age/grade group in the following table:
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[GRAPHIC] [TIFF OMITTED] TR09MY00.012
(4) Offer versus serve. Each school must offer all four required
food items listed in paragraph (g)(1) of this section. At the option of
the school food authority, each school may allow students to refuse one
food item from any component. The refused food item may be any of the
four items offered to the student. A student's decision to accept all
four food items or to decline one of the four food items must not affect
the charge for a reimbursable breakfast.
(5) Meal pattern exceptions for outlying areas. Schools in American
Samoa, Puerto Rico and the Virgin Islands may serve a starchy vegetable
such as yams, plantains, or sweet potatoes to meet the grain/bread
requirement.
(h) What are the requirements for alternate menu planning
approaches?
(1) Definition. Alternate menu planning approaches are those adopted
or developed by school food authorities or State agencies that differ
from the standard approaches established in paragraphs (e) through (g)
of this section.
(2) Use and approval of major changes or new alternate approaches.
Within the guidelines established for developing alternate menu planning
approaches, school food authorities or State agencies may modify one of
the established
[[Page 99]]
menu planning approaches in paragraphs (e) through (g) of this section
or may develop their own menu planning approach. The alternate menu
planning approach must be available in writing for review and monitoring
purposes. No formal plan is required; guidance material, a handbook or
protocol is sufficient. As appropriate, the material must address how
the guidelines in paragraph (h)(3) of this section are met. A State
agency that develops an alternate approach that is exempt from FNS
approval under paragraph (h)(2)(iii) of this section must notify FNS in
writing when implementing the alternate approach.
(i) Approval of local level plans. Any school food authority-
developed menu planning approach must have prior State agency review and
approval.
(ii) Approval of State agency plans. Unless exempt under paragraph
(h)(2)(iii) of this section, any State agency-developed menu planning
approach must have prior FNS approval.
(iii) State agency plans not subject to approval. A State agency-
developed menu planning approach does not need FNS approval if:
(A) Five or more school food authorities in the State use it; and
(B) The State agency maintains on-going oversight of the operation
and evaluation of the approach and makes any needed adjustments to its
policies and procedures to ensure that the appropriate guidelines in
paragraph (h)(3) of this section are met.
(3) Elements for major changes or new approaches. Any alternate menu
planning approach must:
(i) offer fluid milk, as provided in paragraph (i) of this section;
(ii) include the procedures for offer versus serve if the school
food authority chooses to implement the offer versus serve option.
Alternate approaches should follow the offer versus serve procedures in
paragraphs (e)(2)(ii) and (g)(4) of this section, as appropriate. If
these requirements are not followed, the approach must indicate:
(A) The affected age/grade groups;
(B) The number and type of items (and, if applicable, the quantities
for the items) that constitute a reimbursable breakfast under offer
versus serve;
(C) How such procedures will reduce plate waste; and
(D) How a reasonable level of calories and nutrients for the
breakfast as taken is provided.
(iii) Meet the Recommended Dietary Allowances and breakfast energy
allowances (nutrient levels) and indicate the age/grade groups served
and how the nutrient levels are met for those age/grade groups;
(iv) Follow the requirements for competitive foods in Sec. Sec.
220.2(i-1) and 220.12 and appendix B to this part;
(v) Follow the requirements for counting food items and products
towards meeting the meal patterns. These requirements are found in
paragraphs (g) and (i) of this section, in appendices A through C to
this part, and in instructions and guidance issued by FNS. This only
applies if the alternate approach is a food-based menu planning
approach.
(vi) Identify a reimbursable breakfast at the point of service.
(A) To the extent possible, the procedures provided in paragraph
(e)(2)(i) of this section for nutrient standard or assisted nutrient
standard menu planning approaches or for food-based menu planning
approaches provided in paragraph (g) of this section must be followed.
Any instructions or guidance issued by FNS that further defines the
elements of a reimbursable breakfast must be followed when using the
existing regulatory provisions.
(B) Any alternate approach that deviates from the provisions in
paragraph (e)(2)(i) or paragraph (g) of this section must indicate what
constitutes a reimbursable breakfast, including the number and type of
items (and, if applicable, the quantities for the items) which comprise
the breakfast, and how a reimbursable breakfast is to be identified at
the point of service.
(vii) explain how the alternate menu planning approach can be
monitored under the applicable provisions of Sec. 210.18 and Sec.
210.19 of this chapter, including a description of the records that will
be maintained to document compliance with the program's administrative
and nutrition requirements. However, if the procedures under Sec.
210.19 of this chapter cannot be used to monitor the alternate approach,
a
[[Page 100]]
description of review procedures which will enable the State agency to
assess compliance with the nutrition standards in paragraphs (a)(1)
through (a)(4) of this section must be included; and
(viii) follow the requirements for weighted analysis and for
approved software for nutrient standard menu planning as required by
paragraphs (e)(4) and (e)(5) of this section unless a State agency-
developed approach meets the criteria in paragraph (h)(2)(iii) of this
section. Through September 30, 2009, schools are not required to conduct
a weighted analysis.
(i) What are the requirements for offering milk?
(1) Serving milk. A serving of milk as a beverage or on cereal or
used in part for each purpose must be offered for breakfasts.
(2) Inadequate milk supply. If a school cannot get a supply of milk,
it can still participate in the Program under the following conditions:
(i) If emergency conditions temporarily prevent a school that
normally has a supply of fluid milk from obtaining delivery of such
milk, the State agency may allow the school to serve breakfasts during
the emergency period with an alternate form of milk or without milk.
(ii) If a school is unable to obtain a supply of any type of fluid
milk on a continuing basis, the State agency may allow schools to
substitute canned or dry milk in the required quantities in the
preparation of breakfasts. In Alaska, Hawaii, American Samoa, Guam,
Puerto Rico, and the Virgin Islands, if a sufficient supply of fluid
milk cannot be obtained, ``milk'' includes reconstituted or recombined
milk, or otherwise as allowed by FNS through a written exception.
(j) What are the requirements for the infant breakfast pattern?--(1)
Feeding breakfasts to infants. Breakfasts served to infants ages birth
through 11 months must meet the requirements described in paragraph
(j)(4) of this section. Foods included in the breakfast must be of a
texture and a consistency that are appropriate for the age of the infant
being served. The foods must be served during a span of time consistent
with the infant's eating habits. For those infants whose dietary needs
are more individualized, exceptions to the meal pattern must be made in
accordance with the requirements found in paragraph (d)(1) of this
section.
(2) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Meals containing breastmilk and meals containing
iron-fortified infant formula supplied by the school are eligible for
reimbursement. However, infant formula provided by a parent (or
guardian) and breastmilk fed directly by the infant's mother, during a
visit to the school, contribute to a reimbursable breakfast only when
the school supplies at least one component of the infant's meal.
(3) Solid foods. For infants ages 4 through 7 months, solid foods of
an appropriate texture and consistency are required only when the infant
is developmentally ready to accept them. The school should consult with
the infant's parent (or guardian) in making the decision to introduce
solid foods. Solid foods should be introduced one at a time, on a
gradual basis, with the intent of ensuring the infant's health and
nutritional well-being.
(4) Infant meal pattern. Infant breakfasts must have, at a minimum,
each of the food components indicated, in the amount that is appropriate
for the infant's age. For some breastfed infants who regularly consume
less than the minimum amount of breastmilk per feeding, a serving of
less than the minimum amount of breastmilk may be offered. In these
situations, additional breastmilk must be offered if the infant is still
hungry. Breakfasts may include portions of breastmilk and iron-fortified
infant formula as long as the total number of ounces meets, or exceeds,
the minimum amount required of this food component. Similarly, to meet
the component requirement for vegetables and fruit, portions of both may
be served.
(i) Birth through 3 months. 4 to 6 fluid ounces of breastmilk or
iron-fortified infant formula--only breastmilk or iron-fortified formula
is required to meet the infant's nutritional needs.
(ii) 4 through 7 months. Breastmilk or iron-fortified formula is
required. Some infants may be developmentally
[[Page 101]]
ready for solid foods of an appropriate texture and consistency.
Breakfasts are reimbursable when schools provide all of the components
in the meal pattern that the infant is developmentally ready to accept.
(A) 4 to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(B) 0 to 3 tablespoons of iron-fortified dry infant cereal.
(iii) 8 through 11 months. Breastmilk or iron-fortified formula and
solid foods of an appropriate texture and consistency are required.
(A) 6 to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(B) 2 to 4 tablespoons of iron-fortified dry infant cereal; and
(C) 1 to 4 tablespoons of fruit or vegetable.
(5) Infant meal pattern table. The minimum amounts of food
components to serve to infants, as described in paragraph (j)(4) of this
section, are:
Breakfast Pattern for Infants
------------------------------------------------------------------------
8 through 11
Birth through 3 months 4 through 7 months months
------------------------------------------------------------------------
4-6 fluid ounces of formula \1\ 4-8 fluid ounces 6-8 fluid ounces
or breastmilk 2 3. of formula \1\ or of formula \1\ or
breastmilk 2 3; breastmilk 2 3;
and. and
0-3 tablespoons of 2-4 tablespoons of
infant cereal 1 4. infant cereal
\1\; and
1-4 tablespoons of
fruit or
vegetable or
both.
------------------------------------------------------------------------
\1\ Infant formula and dry infant cereal must be iron-fortified.
\2\ Breastmilk or formula, or portions of both, may be served; however,
it is recommended that breastmilk be served in place of formula from
birth through 11 months.
\3\ For some breastfed infants who regularly consume less than the
minimum amount of breastmilk per feeding, a serving of less than the
minimum amount of breastmilk may be offered, with additional
breastmilk offered if the infant is still hungry.
\4\ A serving of this component is required only when the infant is
developmentally ready to accept it.
(k) What about serving additional foods? Schools may offer
additional foods with breakfasts to children over one year of age.
(l) Must schools offer choices at breakfast? FNS encourages schools
to offer children a selection of foods and menu items at breakfast.
Choices provide variety and encourage consumption. Schools may offer
choices of reimbursable breakfasts or foods within a reimbursable
breakfast. When a school offers a selection of more than one type of
breakfast or when it offers a variety of food components, menu items or
foods and milk for choice as a reimbursable breakfast, the school must
offer all children the same selection(s) regardless of whether the child
is eligible for free or reduced price breakfasts or must pay the
designated full price. The school may establish different unit prices
for each type of breakfast offered provided that the benefits made
available to children eligible for free or reduced price breakfasts are
not affected.
(m) What must schools do about nutrition disclosure? To the extent
that school food authorities identify foods in a menu, or on the serving
line or through other available means of communicating with program
participants, school food authorities must identify products or dishes
containing more than 30 parts fully hydrated alternate protein products
(as specified in appendix A of this part) to less than 70 parts beef,
pork, poultry or seafood on an uncooked basis, in a manner which does
not characterize the product or dish solely as beef, pork, poultry or
seafood. Additionally, FNS encourages schools to inform the students,
parents, and the public about efforts they are making to meet the
nutrition standards (see paragraph (a) of this section) for school
breakfasts.
[65 FR 26923, May 9, 2000, as amended at 65 FR 36317, June 8, 2000; 67
FR 36785, May 28, 2002; 69 FR 70874, Dec. 8, 2004]
Sec. 220.9 Reimbursement payments.
(a) State agencies, or FNSRO's where applicable, shall make
reimbursement payments to schools only in connection with breakfasts
meeting the requirements of Sec. 220.8, and reported in accordance with
Sec. 220.11(b) of this part. School Food Authorities shall plan for and
prepare breakfasts on the basis of participation trends, with the
objective of providing one breakfast per child per day. Production and
participation rec ords shall be maintained to demonstrate positive
action toward this objective. In recognition of the fluctuation in
participation levels which makes it difficult to precisely estimate the
number of breakfasts needed and to reduce the resultant waste, any
excess breakfasts that are prepared may be served to eligible children
and may be
[[Page 102]]
claimed for reimbursement unless the State agency, or FNSRO where
applicable, determines that the School Food Authority has failed to plan
and prepare breakfasts with the objective of providing one breakfast per
child per day. In no event shall the School Food Authority claim
reimbursement for free and reduced price breakfasts in excess of the
number of children approved for free and reduced price meals.
(b) The rates of reimbursement for breakfasts served to eligible
children in schools not in severe need are the applicable national
average payment factors for breakfasts. The maximum rates of
reimbursement for breakfasts served to eligible children in schools
determined to be in severe need are those prescribed by the Secretary.
National average payment factors and maximum rates of reimbursement for
the School Breakfast Program shall be prescribed annually by the
Secretary in the Federal Register.
(c) The total reimbursement for breakfasts served to eligible
children in schools not in severe need, and schools in severe need
during the school year shall not exceed the sum of the products obtained
by multiplying the total numbers of such free, reduced price and paid
breakfasts, respectively, by the applicable rate of reimbursement for
each type of breakfast as prescribed for the school year.
(d) The State agency, or FNSRO where applicable, shall determine
whether a school is in severe need based on the following eligibility
criteria:
(1) The school is participating in or desiring to initiate a
breakfast program; and
(2) At least 40 percent of the lunches served to students at the
school in the second preceding school year were served free or at a
reduced price. Schools that did not serve lunches in the second
preceding year and that would like to receive reimbursement at the
severe need rate may apply to their administering State agency. The
administering State agency shall approve or deny such requests in
accordance with guidance, issued by the Secretary, that determines that
the second preceding school year requirement would otherwise have been
met.
(Sec. 6, Pub. L. 95-627, 92 Stat. 3620 (42 U.S.C. 1776; secs. 801, 803,
812; Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1753, 1759(a), 1758,
1773; sec. 819, Pub. L. 97-35, 95 Stat. 533 (42 U.S.C. 1759a, 1773 and
1757); 44 U.S.C. 3506))
[Amdt. 25, 41 FR 34760, Aug. 17, 1976, as amended by Amdt. 29, 44 FR
48159, Aug. 17, 1979; Amdt. No. 38, 46 FR 50928, Oct. 16, 1981; 46 FR
51368, Oct. 20, 1981; 47 FR 746, Jan. 7, 1982; 47 FR 31375, July 20,
1982; 48 FR 40196, 40197, Sept. 6, 1983; 60 FR 31222, June 13, 1995; 65
FR 26923, May 9, 2000; 70 FR 66249, Nov. 2, 2005]
Sec. 220.10 Effective date for reimbursement.
Reimbursement payments under the School Breakfast Program may be
made only to School Food Authorities operating under an agreement with
the State Agency or the Department, and may be made only after execution
of the agreement. Such payments may include reimbursement in connection
with breakfasts served in accordance with provisions of the program in
the calendar month preceding the calendar month in which the agreement
is executed.
[32 FR 35, Jan. 5, 1967, as amended by Amdt. 9, 37 FR 9613, May 13,
1972]
Sec. 220.11 Reimbursement procedures.
(a) To be entitled to reimbursement under this part, each School
Food Authority shall submit to the State agency, or FNSRO where
applicable, a monthly Claim for Reimbursement.
(b) Claims for Reimbursement shall include data in sufficient detail
to justify the reimbursement claimed and to enable the State agency to
provide the Reports of School Program Operations required under Sec.
220.13(b)(2). Unless otherwise approved by FNS, the Claim for
Reimbursement for any month shall include only breakfasts served in that
month except if the first or last month of Program operations for any
year contains 10 operating days or less, such month may be added to the
Claim for Reimbursement for the appropriate adjacent month; however,
Claims for Reimbursement may not combine operations occurring in two
fiscal years. If a single State agency administers any combination of
the Child Nutrition
[[Page 103]]
Programs, the SFA shall be able to use a common claim form with respect
to claims for reimbursement for meals served under those programs. A
final Claim for Reimbursement shall be postmarked and/or submitted to
the State agency, or FNSRO where applicable, not later than 60 days
following the last day of the full month covered by the claim. State
agencies may establish shorter deadlines at their discretion. Claims not
postmarked and/or submitted within 60 days shall not be paid with
Program funds unless FNS determines that an exception should be granted.
The State agency, or FNSRO where applicable, shall promptly take
corrective action with respect to any Claim for Reimbursement as
determined necessary through its claim review process or otherwise. In
taking such corrective action, State agencies may make upward
adjustments in Program funds claimed on claims filed within the 60 day
deadline if such adjustments are completed within 90 days of the last
day of the claim month and are reflected in the final Report of School
Program Operations (FNS-10) for the claim month which is required under
Sec. 220.13(b)(2). Upward adjustments in Program funds claimed which
are not reflected in the final FNS-10 for the claim month shall not be
made unless authorized by FNS. Downward adjustments in Program funds
claimed shall always be made, without FNS authorization, regardless of
when it is determined that such adjustments are necessary.
(c) Where a school participates in both the National School Lunch
Program and the School Breakfast Program, the State agency or FNSRO,
where applicable, may authorize the submission of one claim for
reimbursement to cover both programs.
(d) [Reserved]
(e) Notwithstanding any other provision of this section, the State
agency, or FNSRO where applicable, may advance funds available for the
School Breakfast Program to a School Food Authority in an amount equal
to the reimbursement estimated for the total number of breakfasts,
including free and reduced price breakfasts, to be served to children
for 1 month. The State agency, or FNSRO where applicable, shall require
School Food Authorities who receive advances of funds under the
provisions of this paragraph to make timely submissions of claims for
reimbursement on a monthly basis and shall suspend advances of funds in
the absence of such timely submissions. Following the receipt of claims
the State agency, or FNSRO where applicable, shall make such adjustments
as are necessary in such advances of funds to insure that the total
amount of reimbursement received by a School Food Authority for the
fiscal year will not exceed an amount equal to the number of breakfasts,
including free and reduced price breakfast, served to children times the
respective rates of reimbursement assigned by the State agency, or FNSRO
where applicable, in accordance with Sec. 220.9.
(Title 1, Chapter I, Pub. L. 96-38, 93 Stat. 98 (42 U.S.C. 1776a); secs.
807 and 808, Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1772, 1784,
1760; sec. 819, Pub. L. 97-35, 95 Stat. 533 (42 U.S.C. 1759a, 1773,
1757); Pub. L. 97-370, 96 Stat. 1806)
[32 FR 35, Jan. 5, 1967, as amended by Amdt. 9, 37 FR 9613, May 13,
1972; 40 FR 30924, July 24, 1975; 45 FR 82622, Dec. 16, 1980; 47 FR
31376, July 20, 1982; 48 FR 40196, Sept. 6, 1983; Amdt. 49, 49 FR 18987,
May 4, 1984; 64 FR 50742, Sept. 20, 1999]
Sec. 220.12 Competitive food services.
(a) State agencies and School Food Authorities shall establish such
rules or regulations as are necessary to control the sale of foods in
competition with breakfasts served under the Program. Such rules or
regulations shall prohibit the sale of foods of minimal nutritional
value, as listed in appendix B of this part, in the food service areas
during the breakfast periods. The sale of other competitive foods may,
at the discretion of the State agency and the School Food Authority, be
allowed in the food service area during the breakfast period only if all
income from the sale of such foods accrues to the benefit of the
nonprofit school food service or the school or student organizations
approved by the school. State agencies and School Food Authorities may
impose additional restrictions on the sale of and income from all foods
sold at any time throughout schools participating in the School
Breakfast Program.
[[Page 104]]
(b)(1) Any person may submit a petition to FNS requesting that an
individual food be exempted from a category of foods of minimal
nutritional value listed in appendix B. In the case of artificially
sweetened foods, the petition must include a statement of the percent of
RDI for the eight nutrients listed in Sec. 220.2(i-1) that the food
provides per serving and the petitioner's source of this information. In
the case of all other foods, the petition must include a statement of
the percent of RDI for the eight nutrients listed in Sec. 220.2(i-1)
that the food provides per serving and per 100 calories and the
petitioner's source of this information. The Department will determine
whether or not the individual food is a food of minimal nutritional
value as defined Sec. 220.2(i-1), and will inform the petitioner in
writing of such determination, and the public by notice in the Federal
Register as indicated under paragraph (b)(3) of this section. In
determining whether an individual food is a food of minimal nutritional
value, discrete nutrients added to the food will not be taken into
account.
(2) Any person may submit a petition to FNS requesting that foods in
a particular category of foods be classified as foods of minimal
nutritional value as defined in Sec. 220.2(i-1). The petition must
identify and define the food category in easily understood language,
list examples of the foods contained in the category and include a list
which the foods in that category usually contain. If, upon review of the
petition, the Department determines that the foods in that category
should not be classified as foods of minimal nutritional value, the
petitioner will be so notified in writing. If upon review of the
petition, the Department determines that there is a substantial
likelihood that the foods in that category should be classified as foods
of minimal nutritional value as defined in Sec. 220.2(i-1), the
Department shall at that time inform the petitioner. In addition, the
Department shall publish a proposed rule restricting the sale of the
foods in that category, setting forth the reasons for this action, and
soliciting public comments. On the basis of comments received within 60
days of publication of the proposed rule and other available
information, the Department will determine whether the nutrient
composition of the foods indicates that the category should be
classified as a category of foods of minimal nutritional value.
The petitioner shall be notified in writing and the public shall be
notified of the Department's final determination upon publication in the
Federal Register as indicated under section (b)(3) of this section.
(3) By May 1 and November 1 of each year, the Department shall amend
appendix B to exclude those individual foods identified under paragraph
(b)(1) of this section, and to include those categories of foods
identified under paragraph (b)(2) of this section, Provided That there
are necessary changes.
(Sec. 819, Pub. L. 97-35, 95 Stat. 533 (42 U.S.C. 1759a, 1773 and 1757))
[Amdt. 32, 45 FR 6771, Jan. 29, 1980, as amended by Amdt. 34, 45 FR
76937, Nov. 21, 1980; 50 FR 20547, May 17, 1985; 59 FR 23614, May 6,
1994]
Sec. 220.13 Special responsibilities of State agencies.
(a) [Reserved]
(a-1) Each State agency, or FNSRO where applicable, shall require
each School Food Authority of a school participating in the School
Breakfast Program to develop and file for approval a free and reduced
price policy statement in accordance with paragraph (a) of Sec. 220.7.
(b) Records and reports. (1) Each State agency shall maintain
Program records as necessary to support the reimbursement payments made
to School Food Authorities under Sec. 220.9 and the reports submitted
to FNS under Sec. 220.13(b)(2). The records may be kept in their
original form or on microfilm, and shall be retained for a period of
three years after the date of submission of the final Financial Status
Report for the fiscal year, except that if audit findings have not been
resolved, the records shall be retained beyond the three-year period as
long as required for the resolution of the issues raised by the audit.
(2) Each State agency shall submit to FNS a final Report of School
Program Operations (FNS-10) for each month
[[Page 105]]
which shall be limited to claims submitted in accordance with Sec.
220.11(b) and which shall be postmarked and/or submitted no later than
90 days following the last day of the month covered by the report.
States shall not receive Program funds for any month for which the final
report is not submitted within this time limit unless FNS grants an
exception. Upward adjustments to a State agency's report shall not be
made after 90 days from the month covered by the report unless
authorized by FNS. Downward adjustments shall always be made, without
FNS authorization, regardless of when it is determined that such
adjustments are necessary. Adjustments shall be reported to FNS in
accordance with procedures established by FNS. Each State agency shall
also submit to FNS a quarterly Financial Status Report (SF-269) on the
use of Program funds. Such reports shall be postmarked and/or submitted
no later than 30 days after the end of each fiscal year quarter.
Obligations shall be reported only for the fiscal year in which they
occur. A final Financial Status Report for each fiscal year shall be
postmarked and/or submitted to FNS within 120 days after the end of the
fiscal year. FNS shall not be responsible for reimbursing unpaid Program
obligations reported later than 120 days after the close of the fiscal
year in which they were incurred.
(3) For each of school years 2005-2006 through 2008-2009, each State
agency shall monitor school food authority compliance with the food
safety inspection requirement in Sec. 220.7(a)(2) and submit an annual
report to FNS documenting school compliance based on data supplied by
the school food authorities. The report must be filed by November 15
following each of school years 2005-2006 through 2008-2009, beginning
November 15, 2006. The State agency shall keep the records supplied by
the school food authorities showing the number of food safety
inspections obtained by schools for each of school years 2005-2006
through 2008-2009.
(c) Each State agency shall promptly investigate complaints received
or irregularities noted in connection with the operation of either
program, and shall take appropriate action to correct any
irregularities. State Agencies shall maintain on file evidence of such
investigations and actions. FNS or OI shall make investigations at the
request of the State Agency or where FNS or OI determines investigations
are appropriate.
(d) The State agency shall release to FNS any Federal funds made
available to it under the Act which are unobligated at the end of each
fiscal year. Any such funds shall remain available to FNS for the
purposes of the programs authorized by the Act until expended. Release
of funds by the State Agency shall be made as soon as practicable, but
in any event not later than 30 days following demand by FNSRO and shall
be reflected by related adjustment in the State Agency's Letter of
Credit.
(e) State agencies shall provide School Food Authorities with
monthly information on foods available in plentiful supply, based on
information provided by the Department.
(f) Each State agency shall provide program assistance as follows:
(1) Each State agency or FNSRO where applicable shall provide
consult ative, technical, and managerial personnel to administer
programs, monitor performance, and measure progress toward achieving
program goals.
(2) State agencies shall conduct reviews of schools participating in
the Program for compliance with the provisions of this part when such
schools are being reviewed under the provisions identified under Sec.
210.18(i) of this title. Compliance reviews of participating schools
shall focus on the reviewed school's compliance with the required
certification, counting and breakfast service procedures. School food
authorities may appeal a denial of all or a part of the Claim for
Reimbursement or withholding of payment arising from review activity
conducted by the State agency under Sec. 210.18 of this title or by FNS
under Sec. 210.30(d)(2) of this title. Any such appeal shall be subject
to the procedures set forth under Sec. 210.18(q) of this title or Sec.
210.30(d)(3) of this title, as appropriate.
(3) For the purposes of compliance with the nutrition standards in
Sec. 220.8(a) and the nutrient and calorie
[[Page 106]]
levels in Sec. 220.8(b) or (c) or those developed under Sec.
220.8(e)(1) or (h), the State agency shall follow the provisions
specified Sec. 210.19(a)(1) of this chapter.
(4) Such assistance shall include visits to participating schools to
ensure compliance with program regulations and with the Department's
nondiscrimination regulations (part 15 of this title), issued under
title VI, of the Civil Rights Act of 1964.
(5) Documentation of such assistance shall be maintained on file by
the State agency, or FNSRO where applicable.
(g) State agencies shall adequately safeguard all assets and assure
that they are used solely for authorized purposes.
(h) [Reserved]
(i) Each State agency, or FNS where applicable, shall establish a
financial management system under which School Food Authorities shall
account for all revenues and expenditures of their nonprofit school food
service. The system shall prescribe the allowability of nonprofit school
food service expenditures in accordance with this part and, as
applicable, the cost principles contained in OMB Circular A-87 and 7 CFR
part 3015. The system shall permit determination of school food service
net cash resources, and shall include any criteria for approval of net
cash resources in excess of three months average expenditures. In
addition, School Food Authorities shall be required to account
separately for other food services which are operated by the School Food
Authority.
(j) During audits, supervisory assistance reviews, or by other
means, State agencies, or FNSROs where applicable, shall be responsible
for monitoring the net cash resources of the nonprofit school food
service of each School Food Authority participating in the Program. In
the event that such resources exceed three months average expenditures
for the School Food Authority's nonprofit school food service, or such
amount as may be approved by the State agency or FNSRO where applicable,
the State agency or FNSRO where applicable, may require the School Food
Authority to reduce children's prices, improve food quality or take
other actions designed to improve the nonprofit school food service. In
the absence of any such action, adjustments in the rates of
reimbursement under the Program shall be made.
(k)State agencies shall require compliance by School Food
Authorities with applicable provisions of this part.
(44 U.S.C. 3506; sec. 812, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C.
1759a); sec. 819, Pub. L. 97-35, 95 Stat. 533 (42 U.S.C. 1759a, 1773 and
1757); Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80
Stat 885-890 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C.
1759))
[32 FR 37, Jan. 5, 1967. Redesignated by Amdt. 2, 33 FR 14513, Sept. 27,
1968]
Editorial Note: For Federal Register citations affecting Sec.
220.13, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 220.14 Claims against school food authorities.
(a) State agencies shall disallow any portion of a claim and recover
any payment made to a School Food Authority that was not properly
payable under this part. State agencies will use their own procedures to
disallow claims and recover overpayments already made.
(b) [Reserved]
(c) The State agency may refer to CND through the FNSRO for
determination any action it proposes to take under this section.
(d) The State agency shall maintain all records pertaining to action
taken under this section. Such records shall be retained for a period of
3 years after the end of the fiscal year to which they pertain.
(e) If CND does not concur with the State agency's action in paying
a claim or a reclaim, or in failing to collect an overpayment, CND shall
assert a claim against the State agency for the amount of such claim,
reclaim, or overpayment. In all such cases the State agency shall have
full opportunity to submit to CND evidence or information concerning the
action taken. If, in the determination of CND, the State agency's action
was unwarranted, the State agency shall promptly pay to FNS the amount
of the claim, reclaim, or overpayment.
(f) The amounts recovered by the State agency from Schools may be
utilized, first, to make payments to
[[Page 107]]
School Food Authorities for the purposes of the related program during
the fiscal year for which the funds were initially available, and second
to repay any State funds expended in the reimbursement of claims under
the program and not otherwise repaid. Any amounts recovered which are
not so utilized shall be returned to FNS in accordance with the
requirements of this part.
(g) With respect to School Food Authorities of schools in which the
program is administered by FNSRO, when FNSRO disallows a claim or a
portion of a claim, or makes a demand for refund of an alleged
overpayment, it shall notify the School Food Authority of the reasons
for such disallowance or demand and the School Food Authority shall have
full opportunity to submit evidence or to file reclaims for any amounts
disallowed or demanded in the same manner as that afforded in this
section to School Food Authorities of schools in which the program is
administered by State agencies.
(h) In the event that the State agency or FNSRO, where applicable,
finds that a school is failing to meet the requirements of Sec.
220.8(g), Sec. 220.8(i)(2) and (i)(3), whichever is applicable, the
State agency or FNSRO need not disallow payment or collect an
overpayment arising out of such failure, if the State agency or FNSRO
takes such other action as, in its opinion, will have a corrective
effect.
(i) The Secretary shall have the authority to determine the amount
of, to settle, and to adjust any claim arising under the Program, and to
compromise or deny such claim or any part thereof. The Secretary shall
also have the authority to waive such claims if the Secretary determines
that to do so would serve the purposes of the Program. This provision
shall not diminish the authority of the Attorney General of the United
States under section 516 of Title 28, U.S. Code, to conduct litigation
on behalf of the United States.
(44 U.S.C. 3506; secs. 804, 816 and 817, Pub. L. 97-35, 95 Stat. 521-535
(42 U.S.C. 1753, 1756, 1759, 1771 and 1785))
[32 FR 37, Jan. 5, 1967. Redesignated by Amdt. 2, 33 FR 14513, Sept. 27,
1968, and amended by Amdt. 9, 37 FR 9614, May 13, 1972; 40 FR 30925,
July 24, 1975. Redesignated and amended by Amdt. 25, 41 FR 34757, 34760,
Aug. 17, 1976; 47 FR 746, Jan. 7, 1982; Amdt. 42, 47 FR 14134, Apr. 2,
1982; 60 FR 31222, June 13, 1995; 65 FR 26931, May 9, 2000]
Sec. 220.15 Management evaluations and audits.
(a) State agencies and school food authorities shall comply with the
requirements of part 3015 of this title concerning the audit
requirements for recipients and subrecipients of the Department's
financial assistance.
(b) These requirements call for organization-wide financial and
compliance audits to ascertain whether financial operations are
conducted properly; financial statements are presented fairly;
recipients and subrecipients comply with the laws and regulations that
affect the expenditures of Federal funds; recipients and subrecipients
have established procedures to meet the objectives of federally assisted
programs; and recipients and subrecipients are providing accurate and
reliable information concerning grant funds. States and school food
authorities shall use their own procedures to arrange for and prescribe
the scope of independent audits, provided that such audits comply with
the requirements set forth in part 3016 of this title.
(c) Each State agency shall provide FNS with full opportunity to
conduct management evaluations (including visits to schools) of all
operations of the State agency under the programs covered by this part
and shall provide OA with full opportunity to conduct audits (including
visits to schools) of all operations of the State agency under such
programs. Each State agency shall make available its rec ords, including
records of the receipt and expenditure of funds under such programs,
upon a reasonable request by FNS or OA. OA shall also have the right to
make audits of the records and operations of any school.
[[Page 108]]
(d) In conducting management evaluations, reviews or audits for any
fiscal year, the State agency, FNS, or OIG may disregard any overpayment
if the total overpayment does not exceed $600 or, in the case of State
agency claims in State administered Programs, it does not exceed the
amount established under State law, regulations or procedure as a
minimum amount for which claim will be made for State losses but not to
exceed $600. However, no overpayment is to be disregarded where there is
substantial evidence of violations of criminal law or civil fraud
statutes.
(Secs. 805 and 819, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1773);
sec. 812, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1759a))
[40 FR 30925, July 24, 1975. Redesignated and amended by Amdt. 25, 41 FR
34757, 34760, Aug. 17, 1976; 43 FR 59825, Dec. 22, 1978; Amdt. 41, 47 FR
14135, Apr. 2, 1982; Amdt. 43, 47 FR 18564, Apr. 30, 1982; Amdt. 56, 54
FR 2990, Jan. 23, 1989; 57 FR 38587, Aug. 26, 1992; 59 FR 1894, Jan. 13,
1994; 64 FR 50742, Sept. 20, 1999]
Sec. 220.16 Procurement standards.
(a) Requirements. State agencies and School Food Authorities shall
comply with the requirements of the Office of Management and Budget
(OMB) Circular A-102 and the Department's Uniform Federal Assistance
Regulations, 7 CFR part 3015, subpart S (46 FR 55658) concerning the
procurement of supplies, food, equipment and other services with Program
funds. These requirements are adopted by FNS to ensure that such
materials and services are obtained for the Program efficiently and
economically and in compliance with applicable laws and executive
orders.
(b) Contractual responsibilities. The standards contained in OMB
Circular A-102 and 7 CFR 3015, do not relieve the State agency or School
Food Authority of any contractual responsibilities under its contract.
The State agency or School Food Authority is the responsible authority,
without recourse to FNS, regarding the settlement and satisfaction of
all contractual and administrative issues arising out of procurements
entered into in connection with the Program. This includes but is not
limited to: source evaluation, protests, disputes, claims, or other
matters of a contractual nature. Matters concerning violation of law are
to be referred to the local, State or Federal authority that has proper
jurisdiction.
(c) Procurement procedure. The State agency or School Food Authority
may use their own procurement procedures which reflect applicable State
and local laws and regulations, provided that procurements made with
Program funds adhere to the standards set forth in OMB Circular A-102
and 7 CFR part 3015.
(d) Buy American.--(1) Definition of domestic commodity or product.
In this paragraph (d), the term ``domestic commodity or product''
means--
(i) An agricultural commodity that is produced in the United States;
and
(ii) A food product that is processed in the United States
substantially using agricultural commodities that are produced in the
United States.
(2) Requirement.--(i) In general. Subject to paragraph (d)(2)(ii) of
this section, the Department shall require that a school food authority
purchase, to the maximum extent practicable, domestic commodities or
products.
(ii) Limitations. Paragraph (d)(2)(i) of this section shall apply
only to--
(A) A school food authority located in the contiguous United States;
and
(B) A purchase of domestic commodity or product for the school
breakfast program under this part.
(3) Applicability to Hawaii. Paragraph (d)(2)(i) of this section
shall apply to a school food authority in Hawaii with respect to
domestic commodities or products that are produced in Hawaii in
sufficient quantities to meet the needs of meals provided under the
school breakfast program under this part.
(Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80 Stat.
885-890 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C. 1759))
[Amdt. 45, 48 FR 19355, Apr. 29, 1983, as amended at 64 FR 50743, Sept.
20, 1999]
Sec. 220.17 Prohibitions.
(a) In carrying out the provisions of this part, the Department
shall not impose any requirements with respect to teaching personnel,
curriculum, instructions, methods of instruction, and materials of
instruction in any school
[[Page 109]]
as a condition for participation in the Program.
(b) The value of assistance to children under the Act shall not be
considered to be income or resources for any purposes under any Federal
or State laws, including, but not limited to, laws relating to taxation,
welfare, and public assistance programs. Expenditure of funds from State
and local sources for the maintenance of food programs for children
shall not be diminished as a result of funds received under the Act.
[32 FR 37, Jan. 5, 1967. Redesignated by Amdt. 2, 33 FR 14513, Sept. 27,
1968. Redesignated and amended by Amdt. 25, 41 FR 34757, 34760, Aug. 17,
1976; 64 FR 50743, Sept. 20, 1999]
Sec. 220.18 Suspension, termination and grant closeout procedures.
Whenever it is determined that a State agency has materially failed
to comply with the provisions of this part, or with FNS guidelines and
instructions, FNS may suspend or terminate the Program in whole, or in
part, or take any other action as may be available and appropriate. A
State agency may also terminate the Program by mutual agreement with
FNS. FNS and the State agency shall comply with the provisions of the
Department's Uniform Federal Assistance Regulations, 7 CFR part 3015,
subpart N concerning grant suspension, termination and closeout
procedures. Furthermore, the State agency or FNSRO were applicable,
shall apply these provisions to suspension or termination of the Program
in School Food Authorities.
[Amdt. 49, 49 FR 18988, May 4, 1984]
Sec. 220.19 Free and reduced price breakfasts.
The determination of the children to whom free and reduced price
breakfasts are to be served because of inability to pay the full price
thereof, and the serving of the breakfasts to such children, shall be
effected in accordance with part 245 of this chapter.
[Amdt. 25, 41 FR 34760, Aug. 17, 1976]
Sec. 220.20 Program information.
School Food Authorities desiring information concerning the program
should write to their State educational agency or to the appropriate
Food and Nutrition Service Regional Office as indicated below:
(a) In the States of Delaware, District of Columbia, Maryland, New
Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands, and West
Virginia: Mid-Atlantic Regional Office, FNS, U.S. Department of
Agriculture, 300 Corporate Boulevard, Robbinsville, New Jersey 08691-
1598.
(b) In the States of Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina, and Tennessee: Southeast
Regional Office, FNS, U.S. Department of Agriculture, 161 Forsyth Street
SW., Room 8T36, Atlanta, Georgia 30303.
(c) In the States of Illinois, Indiana, Michigan, Minnesota, Ohio,
and Wisconsin: Midwest Regional Office, FNS, U.S. Department of
Agriculture, 77 West Jackson Boulevard, 20th Floor, Chicago, Illinois
60604-3507.
(d) In the States of Arkansas, Louisiana, New Mexico, Oklahoma, and
Texas: Southwest Regional Office, FNS, U.S. Department of Agriculture,
1100 Commerce Street, Room 5-C-30, Dallas, Texas 75242.
(e) In the States of Alaska, American Samoa, Arizona, California,
Guam, Hawaii, Idaho, Nevada, Oregon, the Commonwealth of the Northern
Mariana Islands, and Washington: Western Regional Office, FNS, U.S.
Department of Agriculture, 550 Kearny Street, Room 400, San Francisco,
California 94108.
(f) In the States of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, and Vermont: Northeast Regional
Office, FNS, U.S. Department of Agriculture, 10 Causeway Street, Room
501, Boston, Massachusetts 02222-1065.
(g) In the States of Colorado, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah, and Wyoming: Mountain Plains
Regional Office, FNS, U.S. Department of
[[Page 110]]
Agriculture, 1244 Speer Boulevard, Suite 903, Denver, Colorado 80204.
(Sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760); sec.
10(d)(3), Pub. L. 95-627, 92 Stat. 3624 (42 U.S.C. 1757); sec. 14, Pub.
L. 95-627, 92 Stat. 3625-3626; secs. 804, 816, 817 and 819, Pub. L. 97-
35, 95 Stat. 521-535 (42 U.S.C. 1753, 1756, 1759, 1771, 1773, and 1785))
[32 FR 37, Jan. 5, 1967. Redesignated at 49 FR 18988, May 4, 1984]
Editorial Note: For Federal Register citations affecting Sec.
220.20, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 220.21 Information collection/recordkeeping--OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control
number
------------------------------------------------------------------------
220.3(e)................................................... 0584-0327
220.5...................................................... 0584-0012
220.7(a)-(e)............................................... 0584-0329
0584-0012
0584-0026
220.8(f)................................................... 0584-0012
220.9(a)................................................... 0584-0012
220.11 (a), (b), (e)....................................... 0584-0012
0584-0002
0584-0341
220.12(b).................................................. 0584-0012
220.13 (a-1)-(c), (f)...................................... 0584-0026
0584-0002
0584-0341
0584-0012
220.14(d).................................................. 0584-0012
220.15..................................................... 0584-0012
------------------------------------------------------------------------
[Amdt. 56, 54 FR 2990, Jan. 23, 1989]
Appendix A to Part 220--Alternate Foods for Meals
I. Formulated Grain-Fruit Products
1. Schools may utilize the formulated grain-fruit products defined
in paragraph 3 as a food component in meeting the meal requirements of
this part under the following terms and conditions:
(a) Formulated grain-fruit products may be used to meet one bread/
bread alternate and the fruit/vegetable requirement in the breakfast
pattern specified in Sec. 220.8.
(b) Only individually wrapped formulated grain-fruit products which
bear a label conforming to the following legend shall be utilized.
``This product conforms to U.S.D.A. Child Nutrition Program
specifications. For breakfast, it meets the requirements for fruit/
vegetable/juice and one bread/bread alternate.''
2. Only formulated grain-fruit products that have been accepted by
the Food and Nutrition Service (FNS) for use in the USDA child nutrition
programs may be labeled as provided in paragraph 1.(b) of this appendix.
Manufacturers seeking acceptance of their product shall furnish FNS a
chemical analysis, protein efficiency ratio analysis, and such other
pertinent data as may be requested by FNS. This information shall be
forwarded to: Director, Nutrition and Technical Services Staff, Food and
Nutrition Service, U.S. Department of Agriculture, Alexandria, Virginia
22302. All laboratory analyses are to be performed by independent or
other laboratories acceptable to FNS. (FNS prefers an independent
laboratory.) All laboratories shall retain the ``raw'' laboratory data
for a period of one year. Such information shall be made available to
FNS upon request.
3. To be accepted by FNS, products must have the following
characteristics and meet the following nutritional specifications:
(a) Types. There are two types of products: one is a grain-type
product and the other a grain-fruit type product.
(b) Ingredients. A grain-type product shall have grain as its
primary ingredient. A grain-fruit type product shall have fruit as its
primary ingredient. Both types of products must have at least 25 percent
of their weight derived from grain. All ingredients and/or components
shall comply with pertinent requirements or standards of the USDA and
the Food, Drug, and Cosmetic Act, as amended, and any regulations issued
thereunder.
(c) Nutritional specifications. Each serving of the product shall
meet the minimum compositional requirements in the following table. The
requirements as specified for those nutrients not limited by maximum
values will be deemed to have been met if reasonable overages of the
vitamins and minerals, within the limits of good manufacturing practice,
are present to insure that the required levels are maintained throughout
the expected shelf life under customary conditions of distribution and
storage. An exception will be made for vitamins or minerals which occur
naturally in an ingredient at such concentration that the level
specified will be substantially exceeded in the final product. Such
excess will be permitted but no lable claim of nutritional advantage can
be made for overages for any nutrients. Analytical methods employed
should be according to the standard procedures defined in the
Association of Official Analytical Chemists, 1970, ``Official Methods of
Analysis,'' 11th edition, Washington, DC or by appropriate analytical
procedures FNS considers reliable.
[[Page 111]]
Nutritional Levels of Grain-Fruit Products \1\
------------------------------------------------------------------------
Nutrient Unit Minimum Maximum
------------------------------------------------------------------------
Weight.......................... Ounce............... 2 4.0
PER............................. Casein=2.5.......... 2.0
Moisture........................ Percent weight...... ....... 40.0
Fat \2\......................... ......do............ ....... 22.0
Fiber........................... ......do............ ....... 0.8
Protein (Nx6.25)................ Gram................ 5.0
Energy.......................... Kilocalorie......... 250
Vitamin A \3\................... International unit.. 1,115 1,675.0
Vitamin E....................... ......do............ 5
Vitamin B12..................... Microgram........... 1.25
Thiamin......................... Milligram........... .26
Riboflavin...................... ......do............ .13
Vitamin B6...................... ......do............ .26
Vitamin C....................... ......do............ 20
Niacin.......................... ......do............ 2.65
Folacin......................... ......do............ .04
Iron \4\........................ ......do............ 4.4
Calcium......................... ......do............ 120
Phosphorus...................... ......do............ 120
Magnesium....................... ......do............ 30
------------------------------------------------------------------------
\1\ These specifications are based on a nutrient level for acceptable
products plus \1/2\ pint of fluid milk (as defined in Sec. 220.2 of
the regulations (7 CFR part 220)) to provide at least 25 percent of
the Recommended Dietary Allowances (RDA), 1968, for 10- to 12-year-old
boys and girls for specified nutrients except magnesium and
kilocalories. Magnesium and kilocalories--at least 13 percent of this
RDA.
\2\ Although the maximum fat in these specifications is 22 percent,
consideration should be given to the development of formulated items
containing less fat. Most medical authorities recommend keeping the
dietary intake of fats at about \1/3\ of the day's calories. At least
5 percent of the total calories shall be from linoleic acid.
\3\ Vitamin A levels above the maximum of 1,675 I.U. will be allowed in
products containing this nutrient as a natural food, and if the
vitamin has not been added to the ingredients or foods.
\4\ Recommended sources of iron are ferric ammonium citrate, ferrous
fumarate, ferrous sulfates (FeSO4 or FeSO4 7H2 O), ferrous gluconate,
reduced iron, or other sources known to have a similar relative
biological value.
II. Alternate Protein Products
A. What Are the Criteria for Alternate Protein Products Used in the
School Breakfast Program?
1. An alternate protein product used in meals planned under the
food-based menu planning approaches in Sec. 220.8(g), must meet all of
the criteria in this section.
2. An alternate protein product whether used alone or in combination
with meat or other meat alternates must meet the following criteria:
a. The alternate protein product must be processed so that some
portion of the non-protein constituents of the food is removed. These
alternate protein products must be safe and suitable edible products
produced from plant or animal sources.
b. The biological quality of the protein in the alternate protein
product must be at least 80 percent that of casein, determined by
performing a Protein Digestibility Corrected Amino Acid Score (PDCAAS).
c. The alternate protein product must contain at least 18 percent
protein by weight when fully hydrated or formulated. (``When hydrated or
formulated'' refers to a dry alternate protein product and the amount of
water, fat, oil, colors, flavors or any other substances which have been
added).
d. Manufacturers supplying an alternate protein product to
participating schools or institutions must provide documentation that
the product meets the criteria in paragraphs A.2. a through c of this
appendix.
e. Manufacturers should provide information on the percent protein
contained in the dry alternate protein product and on an as prepared
basis.
f. For an alternate protein product mix, manufacturers should
provide information on:
(1) The amount by weight of dry alternate protein product in the
package;
(2) Hydration instructions; and
(3) instructions on how to combine the mix with meat or other meat
alternates.
B. How Are Alternate Protein Products Used in the School Breakfast
Program?
1. Schools, institutions, and service institutions may use alternate
protein products to fulfill all or part of the meat/meat alternate
component discussed in Sec. 220.8. The following terms and conditions
apply:
a. The alternate protein product may be used alone or in combination
with other food ingredients. Examples of combination items are beef
patties, beef crumbles, pizza topping, meat loaf, meat sauce, taco
filling, burritos, and tuna salad.
b. Alternate protein products may be used in the dry form
(nonhydrated), partially hydrated or fully hydrated form. The moisture
content of the fully hydrated alternate protein product (if prepared
from a dry concentrated form) must be such that the mixture will have a
minimum of 18 percent protein by weight or equivalent amount for the dry
or partially hydrated form (based on the level that would be provided if
the product were fully hydrated).
C. How Are Commercially Prepared Products Used in the School Breakfast
Program?
Schools, institutions, and service institutions may use a
commercially prepared meat or other meat alternate products combined
with alternate protein products or use a commercially prepared product
that contains only alternate protein products.
(Secs. 804, 816, 817, and 819, Pub. L. 97-35, 95 Stat. 521-535 (42
U.S.C. 1753, 1756, 1759, 1771, 1773 and 1785))
[Amdt. 18, 39 FR 11249, Mar. 27, 1974, as amended at 40 FR 37027, Aug.
25, 1975; Amdt. 45, 48 FR 195, Jan. 4, 1983; Amdt. 57, 54 FR 13048, Mar.
30, 1989; 60 FR 31222, June 13, 1995; 65 FR 12436, Mar. 9, 2000; 65 FR
26923, May 9, 2000]
[[Page 112]]
Appendix B to Part 220--Categories of Foods of Minimal Nutritional Value
(1) Soda Water--A class of beverages made by absorbing carbon
dioxide in potable water. The amount of carbon dioxide used is not less
than that which will be absorbed by the beverage at a pressure of one
atmosphere and at a temperature of 60[deg] F. It either contains no
alcohol or only such alcohol, not in excess of 0.5 percent by weight of
the finished beverage, as is contributed by the flavoring ingredient
used. No product shall be excluded from this definition because it
contains artificial sweeteners or discrete nutrients added to the food
such as vitamins, minerals and protein.
(2) Water ices. As defined by 21 CFR 135.160 Food and Drug
Administration Regulations except that water ices which contain fruit or
fruit juices are not included in this definition.
(3) Chewing gum. Flavored products from natural or synthetic gums
and other ingredients which form an insoluble mass for chewing.
(4) Certain candies. Processed foods made predominantly from
sweeteners or artificial sweeteners with a variety of minor ingredients
which characterize the following types: (a) Hard candy. A product made
predominantly from sugar (sucrose) and corn syrup which may be flavored
and colored, is characterized by a hard, brittle texture, and includes
such items as sour balls, fruit balls, candy sticks, lollipops,
starlight mints, after dinner mints, sugar wafers, rock candy, cinnamon
candies, breath mints, jaw breakers and cough drops.
(b) Jellies and gums. A mixture of carbohydrates which are combined
to form a stable gelatinous system of jelly-like character, and are
generally flavored and colored, and include gum drops, jelly beans,
jellied and fruit-flavored slices.
(c) Marshmallow candies. An aerated confection composed of sugar,
corn syrup, invert sugar, 20% water and gelatin or egg white to which
flavors and colors may be added.
(d) Fondant. A product consisting of microscopic-sized sugar
crystals which are separated by a thin film of sugar and/or invert sugar
in solution such as candy corn, soft mints.
(e) Licorice. A product made predominantly from sugar and corn syrup
which is flavored with an extract made from the licorice root.
(f) Spun candy. A product that is made from sugar that has been
boiled at high temperature and spun at a high speed in a special
machine.
(g) Candy coated popcorn. Popcorn which is coated with a mixture
made predominantly from sugar and corn syrup.
Schedule for Amending Appendix B
------------------------------------------------------------------------
Publication
Actions for publication ---------------------------------------
May November
------------------------------------------------------------------------
Deadline for receipt of Nov. 15........... May 15.
petitions by USDA.
USDA to notify petitioners of Feb. 1............ Aug. 1.
results of Departmental review
and publish proposed rule (if
applicable).
60 Day Comment Period........... Feb 1 through Apr. Aug. 1 through
1. Oct. 1.
Public Notice of Amendment of May 1............. Nov. 1.
Appendix B by.
------------------------------------------------------------------------
Written petitions should be sent to the Chief, Technical Assistance
Branch, Nutrition and Technical Services Divisions, FNS, USDA,
Alexandria, Virginia 22302 on or before November 15 or May 15 of each
year. Petitions must include all information specified in Sec.
210.15b(b) (1) or (2), and Sec. 220.12(b) (1) or (2) as appropriate.
(Sec. 17, Pub. L. 95-166, 91 Stat. 1345 (42 U.S.C. 1779); secs. 804,
816, 817 and 819, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753, 1756,
1759, 1771, 1773 and 1785))
[Amdt. 32, 45 FR 6772, Jan. 29, 1980, as amended at 45 FR 72081, Oct.
31, 1980; 45 FR 76937, Nov. 21, 1980; Amdt. 45, 48 FR 195, Jan. 4, 1983;
54 FR 18466, May 1, 1989]
Appendix C to Part 220--Child Nutrition (CN) Labeling Program
1. The Child Nutrition (CN) Labeling Program is a voluntary
technical assistance program administered by the Food and Nutrition
Service (FNS) in conjunction with the Food Safety and Inspection Service
(FSIS), and Agricultural Marketing Service (AMS) of the U.S. Department
of Agriculture (USDA), and National Marine Fisheries Service of the U.S.
Department of Commerce (USDC) for the Child Nutrition Programs. This
program essentially involves the review of a manufacturer's recipe or
product formulation to determine the contribution a serving of a
commercially prepared product makes toward meal pattern requirements and
a review of the CN label statement to ensure its accuracy. CN labeled
products must be produced in accordance with all requirements set forth
in this rule.
2. Products eligible for CN labels are as follows:
(a) Commercially prepared food products that contribute
significantly to the meat/meat alternate component of meal pattern
requirements of 7 CFR 210.10 or 210.10a, whichever is applicable,
225.21, and 226.20 and are served in the main dish.
[[Page 113]]
(b) Juice drinks and juice drink products that contain a minimum of
50 percent full-strength juice by volume.
3. For the purpose of this appendix the following definitions apply:
(a) ``CN label'' is a food product label that contains a CN label
statement and CN logo as defined in paragraph 3 (b) and (c) below.
(b) The ``CN logo'' (as shown below) is a distinct border which is
used around the edges of a ``CN label statement'' as defined in
paragraph 3(c).
[GRAPHIC] [TIFF OMITTED] TC17SE91.003
(c) The ``CN label statement'' includes the following:
(1) The product identification number (assigned by FNS),
(2) The statement of the product's contribution toward meal pattern
requirements of 7 CFR 210.10 or 210.10a, whichever is applicable, 220.8,
225.21, and 226.20. The statement shall identify the contribution of a
specific portion of a meat/meat alternate product toward the meat/meat
alternate, bread/bread alternate, and/or vegetable/fruit component of
the meal pattern requirements. For juice drinks and juice drink products
the statement shall identify their contribution toward the vegetable/
fruit component of the meal pattern requirements,
(3) Statement specifying that the use of the CN logo and CN
statement was authorized by FNS, and
(4) The approval date.
For example:
[GRAPHIC] [TIFF OMITTED] TC17SE91.004
(d) Federal inspection means inspection of food products by FSIS,
AMS or USDC.
4. Food processors or manufacturers may use the CN label statement
and CN logo as defined in paragraph 3 (b) and (c) under the following
terms and conditions:
(a) The CN label must be reviewed and approved at the national level
by the Food and Nutrition Service and appropriate USDA or USDC Federal
agency responsible for the inspection of the product.
(b) The CN labeled product must be produced under Federal inspection
by USDA or USDC. The Federal inspection must be performed in accordance
with an approved partial or total quality control program or standards
established by the appropriate Federal inspection service.
(c) The CN label statement must be printed as an integral part of
the product label along with the product name, ingredient listing, the
inspection shield or mark for the appropriate inspection program, the
establishment number where appropriate, and the manufacturer's or
distributor's name and address.
(1) The inspection marking for CN labeled non-meat, non-poultry, and
non-seafood products with the exception of juice drinks and juice drink
products is established as follows:
[GRAPHIC] [TIFF OMITTED] TC17SE91.005
[[Page 114]]
(d) Yields for determining the product's contribution toward meal
pattern requirements must be calculated using the Food Buying Guide for
Child Nutrition Programs (Program Aid Number 1331).
5. In the event a company uses the CN logo and CN label statement
inappropriately, the company will be directed to discontinue the use of
the logo and statement and the matter will be referred to the
appropriate agency for action to be taken against the company.
6. Products that bear a CN label statement as set forth in paragraph
3(c) carry a warranty. This means that if a food service authority
participating in the child nutrition programs purchases a CN labeled
product and uses it in accordance with the manufacturer's directions,
the school or institution will not have an audit claim filed against it
for the CN labeled product for noncompliance with the meal pattern
requirements of 7 CFR 210.10 or 210.10a, whichever is applicable, 220.8,
225.21, and 226.20. If a State or Federal auditor finds that a product
that is CN labeled does not actually meet the meal pattern requirements
claimed on the label, the auditor will report this finding to FNS. FNS
will prepare a report of the findings and send it to the appropriate
divisions of FSIS and AMS of the USDA, National Marine Fisheries
Services of the USDC, Food and Drug Administration, or the Department of
Justice for action against the company.
Any or all of the following courses of action may be taken:
(a) The company's CN label may be revoked for a specific period of
time;
(b) The appropriate agency may pursue a misbranding or mislabeling
action against the company producing the product;
(c) The company's name will be circulated to regional FNS offices;
(d) FNS will require the food service program involved to notify the
State agency of the labeling violation.
7. FNS is authorized to issue operational policies, procedures, and
instructions for the CN Labeling Program.
To apply for a CN label and to obtain additional information on CN
label application procedures write to: CN Labels, U.S. Department of
Agriculture, Food and Nutrition Service, Nutrition and Technical
Services Division, 3101 Park Center Drive, Alexandria, Virginia 22302.
(National School Lunch Act, secs. 9, 13, 17; 42 U.S.C. 1758, 1761, 1766;
7 CFR 210.10, 220.8, 225.21, 226.20)
[49 FR 18457, May 1, 1984; 49 FR 45109, Nov. 15, 1984; 60 FR 31222, June
13, 1995; 65 FR 26923, May 9, 2000]
PART 225_SUMMER FOOD SERVICE PROGRAM--Table of Contents
Subpart A_General
Sec.
225.1 General purpose and scope.
225.2 Definitions.
225.3 Administration.
Subpart B_State Agency Provisions
225.4 Program management and administration plan.
225.5 Payments to State agencies and use of Program funds.
225.6 State agency responsibilities.
225.7 Program monitoring and assistance.
225.8 Records and reports.
225.9 Program assistance to sponsors.
225.10 Audits and management evaluations.
225.11 Corrective action procedures.
225.12 Claims against sponsors.
225.13 Appeal procedures.
Subpart C_Sponsor and Site Provisions
225.14 Requirements for sponsor participation.
225.15 Management responsibilities of sponsors.
225.16 Meal service requirements.
Subpart D_General Administrative Provisions
225.17 Procurement standards.
225.18 Miscellaneous administrative provisions.
225.19 Regional office addresses.
225.20 Information collection/recordkeeping--OMB assigned control
numbers.
Appendix A to Part 225--Alternate Foods for Meals
Appendix B to Part 225 [Reserved]
Appendix C to Part 225--Child Nutrition (CN) Labeling Program
Authority: Secs. 9, 13 and 14, National School Lunch Act, as amended
(42 U.S.C. 1758, 1761 and 1762a).
Source: 54 FR 18208, Apr. 27, 1989, unless otherwise noted.
Subpart A_General
Sec. 225.1 General purpose and scope.
This part establishes the regulations under which the Secretary will
administer a Summer Food Service Program. Section 13 of the Act
authorizes the Secretary to assist States through grants-in-aid to
conduct nonprofit food service programs for children during
[[Page 115]]
the summer months and at other approved times. The primary purpose of
the Program is to provide food service to children from needy areas
during periods when area schools are closed for vacation.
Sec. 225.2 Definitions.
Act means the National School Lunch Act, as amended.
Administrative costs means costs incurred by a sponsor related to
planning, organizing, and managing a food service under the Program, and
excluding interest costs and operating costs.
Adult means, for the purposes of the collection of social security
numbers as a condition of eligibility for Program meals, any individual
21 years of age or older.
Advance payments means financial assistance made available to a
sponsor for its operating costs and/or administrative costs prior to the
end of the month in which such costs will be incurred.
Areas in which poor economic conditions exist means:
(a) The local areas from which an open site and restricted open site
draw their attendance in which at least 50 percent of the children are
eligible for free or reduced-price school meals under the National
School Lunch Program and the School Breakfast Program, as determined:
(1) By information provided from departments of welfare and
education, zoning commissions, census tracts, and organizations
determined by the State agency to be migrant organizations;
(2) By the number of free and reduced-price lunches or breakfasts
served to children attending public and nonprofit private schools
located in the areas of Program sites; or
(3) From other appropriate sources; or
(b) A closed enrolled site.
Camps means residential summer camps and nonresidential day camps
which offer a regularly scheduled food service as part of an organized
program for enrolled children. Nonresidential camp sites shall offer a
continuous schedule of organized cultural or recreational programs for
enrolled children between meal services.
Children means (a) persons 18 years of age and under, and (b)
persons over 18 years of age who are determined by a State educational
agency or a local public educational agency of a State to be mentally or
physically handicapped and who participate in a public or nonprofit
private school program established for the mentally or physically
handicapped.
Closed enrolled site means a site which is open only to enrolled
children, as opposed to the community at large, and in which at least 50
percent of the enrolled children at the site are eligible for free or
reduced price school meals under the National School Lunch Program and
the School Breakfast Program, as determined by approval of applications
in accordance with Sec. 225.15(f).
Continuous school calendar means a situation in which all or part of
the student body of a school is (a) on a vacation for periods of 15
continuous school days or more during the period October through April
and (b) in attendance at regularly scheduled classes during most of the
period May through September.
Costs of obtaining food means costs related to obtaining food for
consumption by children. Such costs may include, in addition to the
purchase price of agricultural commodities and other food, the cost of
processing, distributing, transporting, storing, or handling any food
purchased for, or donated to, the Program.
Current income means income, as defined in Sec. 225.15(f)(4)(vi),
received during the month prior to application for free meals. If such
income does not accurately reflect the household's annual income, income
must be based on the projected annual household income. If the prior
year's income provides an accurate reflection of the household's current
annual income, the prior year may be used as a base for the projected
annual income.
Department means the U.S. Department of Agriculture.
Disclosure means individual children's program eligibility
information obtained through the free and reduced price meal eligibility
process that is revealed or used for a purpose other
[[Page 116]]
than for the purpose for which the information was obtained. The term
refers to access, release, or transfer of personal data about children
by means of print, tape, microfilm, microfiche, electronic communication
or any other means.
Documentation means:
(a) The completion of the following information on a free meal
application:
(1) Names of all household members;
(2) Income received by each household member, identified by source
of income (such as earnings, wages, welfare, pensions, support payments,
unemployment compensation, social security and other cash income);
(3) The signature of an adult household member; and
(4) The social security number of the adult household member who
signs the application, or an indication that he/she does not possess a
social security number; or
(b) For a child who is a member of a household receiving food stamp,
FDPIR, or TANF benefits, ``documentation'' means completion of only the
following information on a free meal application:
(1) The name(s) and appropriate food stamp, FDPIR, or TANF case
number(s) for the child(ren); and
(2) the signature of an adult member of the household.
Experienced site means a site which, as determined by the State
agency, has successfully participated in the Program in the prior year.
Experienced sponsor means a sponsor which, as determined by the
State agency, has successfully participated in the Program in the prior
year.
Family means a group of related or nonrelated individuals who are
not residents of an institution or boarding house but who are living as
one economic unit.
FDPIR household means any individual or group of individuals which
is currently certified to receive assistance as a household under the
Food Distribution Program on Indian Reservations.
Fiscal year means the period beginning October 1 of any calendar
year and ending September 30 of the following calendar year.
FNS means the Food and Nutrition Service of the Department.
FNSRO means the appropriate FNS Regional Office.
Food service management company means any commercial enterprise or
nonprofit organization with which a sponsor may contract for preparing
unitized meals, with or without milk, for use in the Program, or for
managing a sponsor's food service operations in accordance with the
limitations set forth in Sec. 225.15. Food service management companies
may be: (a) Public agencies or entities; (b) private, nonprofit
organizations; or (c) private, for-profit companies.
Food stamp household means any individual or group of individuals
which is currently certified to receive assistance as a household under
the Food Stamp Program.
Household means ``family,'' as defined in this section.
Income accruing to the program means all funds used by a sponsor in
its food service program, including but not limited to all monies, other
than program payments, received from Federal, State and local
governments, from food sales to adults, and from any other source
including cash donations or grants. Income accruing to the Program will
be deducted from combined operating and administrative costs.
Income standards means the family-size and income standards
prescribed annually by the Secretary for determining eligibility for
reduced price meals under the National School Lunch Program and the
School Breakfast Program.
Meals means food which is served to children at a food service site
and which meets the nutritional requirements set out in this part.
Medicaid means the State medical assistance program under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.).
Milk means whole milk, lowfat milk, skim milk, and buttermilk. All
milk must be fluid and pasteurized and must meet State and local
standards for the appropriate type of milk. Milk served may be flavored
or unflavored. In Alaska, Hawaii, American Samoa, Guam, Puerto Rico, the
Trust Territory of the Pacific Islands, the Northern Mariana
[[Page 117]]
Islands, and the Virgin Islands of the United States, if a sufficient
supply of such types of fluid milk cannot be obtained, reconstituted or
recombined milk may be used. All milk should contain Vitamins A and D at
the levels specified by the Food and Drug Administration and at levels
consistent with State and local standards for such milk.
Needy children means children from families whose incomes are equal
to or below the Secretary's Guidelines for Determining Eligibility for
Reduced Price School Meals.
New site means a site which did not participate in the Program in
the prior year, or, as determined by the State agency, a site which has
experienced significant staff turnover from the prior year.
New sponsor means a sponsor which did not participate in the Program
in the prior year, or, as determined by the State agency, a sponsor
which has experienced significant staff turnover from the prior year.
NYSP means the National Youth Sports Program administered by the
National Collegiate Athletic Association.
NYSP feeding site means a site at which all of the children
receiving Program meals are enrolled in the NYSP and which qualifies for
Program participation on the basis of documentation that the site meets
the definition of ``areas in which poor economic conditions exist'' as
provided in this section.
OIG means the Office of the Inspector General of the Department.
Open site means a site at which meals are made available to all
children in the area and which is located in an area in which at least
50 percent of the children are from households that would be eligible
for free or reduced price school meals under the National School Lunch
Program and the School Breakfast Program, as determined in accordance
with paragraph (a) of the definition of Areas in which poor economic
conditions exist.
Operating costs means the cost of operating a food service under the
Program,
(a) Including the (1) cost of obtaining food, (2) labor directly
involved in the preparation and service of food, (3) cost of nonfood
supplies, (4) rental and use allowances for equipment and space, and (5)
cost of transporting children in rural areas to feeding sites in rural
areas, but
(b) Excluding (1) the cost of the purchase of land, acquisition or
construction of buildings, (2) alteration of existing buildings, (3)
interest costs, (4) the value of in-kind donations, and (5)
administrative costs.
Private nonprofit means tax exempt under the Internal Revenue Code
of 1986, as amended.
Private nonprofit organization means an organization (other than
private nonprofit residential camps, school food authorities, or
colleges or universities participating in the NYSP) which meets the
definition of ``private nonprofit'' in this section and which:
(a) Administers the Program:
(1) At no more than 25 sites, with not more than 300 children being
served at any approved meal service at any one site; or
(2) With a waiver granted by the State in accordance with Sec.
225.6(b)(ii), not more than 500 children being served at any approved
meal service at any one site;
(b) Operates in areas where a school food authority has not
indicated that it will operate the Program in the current year;
(c) Exercises full control and authority over the operation of the
Program at all sites under its sponsorship;
(d) Provides ongoing year-round activities for children or families;
(e) Demonstrates that it possesses adequate management and the
fiscal capacity to operate the Program; and
(f) Meets applicable State and local health, safety, and sanitation
standards.
Program means the Summer Food Service Program for Children
authorized by Section 13 of the Act.
Program funds means Federal financial assistance made available to
State agencies for the purpose of making Program payments.
Program payments means financial assistance in the form of start-up
payments, advance payments, or reimbursement paid to sponsors for
operating and administrative costs.
[[Page 118]]
Restricted open site means a site which is initially open to broad
community participation, but at which the sponsor restricts or limits
attendance for reasons of security, safety or control. Site eligibility
for a restricted open site shall be documented in accordance with
paragraph (a) of the definition of Areas in which poor economic
conditions exist.
Rural means (a) any area in a county which is not a part of a
Metropolitan Statistical Area or (b) any ``pocket'' within a
Metropolitan Statistical Area which, at the option of the State agency
and with FNSRO concurrence, is determined to be geographically isolated
from urban areas.
School food authority means the governing body which is responsible
for the administration of one or more schools and which has the legal
authority to operate a lunch program in those schools. In addition, for
the purpose of determining the applicability of food service management
company registration and bid procedure requirements, ``school food
authority'' also means any college or university which participates in
the Program.
Secretary means the Secretary of Agriculture.
Self-preparation sponsor means a sponsor which prepares the meals
that will be served at its site(s) and does not contract with a food
service management company for unitized meals, with or without milk, or
for management services.
Session means a specified period of time during which an enrolled
group of children attend camp.
Site means a physical location at which a sponsor provides a food
service for children and at which children consume meals in a supervised
setting.
Special account means an account which a State agency may require a
vended sponsor to establish with the State agency or with a Federally
insured bank. Operating costs payable to the sponsor by the State agency
are deposited in the account and disbursement of monies from the account
must be authorized by both the sponsor and the food service management
company.
Sponsor means a public or private nonprofit school food authority, a
public or private nonprofit residential summer camp, a unit of local,
municipal, county or State government, a public or private nonprofit
college or university currently participating in the NYSP, or a private
nonprofit organization which develops a special summer or other school
vacation program providing food service similar to that made available
to children during the school year under the National School Lunch and
School Breakfast Programs and which is approved to participate in the
Program. Sponsors are referred to in the Act as ``service
institutions''.
Start-up payments means financial assistance made available to a
sponsor for administrative costs to enable it to effectively plan a
summer food service, and to establish effective management procedures
for such a service. These payments shall be deducted from subsequent
administrative cost payments.
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands of the United States,
Guam, American Samoa, the Trust Territory of the Pacific Islands, and
the Northern Mariana Islands.
State agency means the State educational agency or an alternate
agency that has been designated by the Governor or other appropriate
executive or legislative authority of the State and which has been
approved by the Department to administer the Program within the State,
or, in States where FNS administers the Program, FNSRO.
State Children's Health Insurance Program (SCHIP) means the State
medical assistance program under title XXI of the Social Security Act
(42 U.S.C. 1397aa et seq.).
TANF means the State funded program under part A of title IV of the
Social Security Act that the Secretary determines complies with
standards established by the Secretary that ensure that the standards
under the State program are comparable to or more restrictive than those
in effect on June 1, 1995. This program is commonly referred to as
Temporary Assistance for Needy Families, although States may refer to
the program by another name.
Unit of local, municipal, county or State government means an entity
which is so recognized by the State constitution or State laws, such as
the State
[[Page 119]]
administrative procedures act, tax laws, or other applicable State laws
which delineate authority for government responsibility in the State.
Vended sponsor means a sponsor which purchases from a food service
management company the unitized meals, with or without milk, which it
will serve at its site(s), or a sponsor which purchases management
services, subject to the limitations set forth in Sec. 225.15, from a
food service management company.
Yogurt means commercially prepared coagulated milk products obtained
by the fermentation of specific bacteria, that meet milk fat or milk
solid requirements and to which flavoring foods or ingredients may be
added. These products are covered by the Food and Drug Administration's
Standard of Identity for yogurt, lowfat yogurt, and nonfat yogurt, (21
CFR 131.200), (21 CFR 131.203), (21 CFR 131.206), respectively.
[54 FR 18208, Apr. 27, 1989, as amended at 54 FR 27153, June 28, 1989;
55 FR 13466, Apr. 10, 1990; 61 FR 25553, May 22, 1996; 64 FR 72483, Dec.
28, 1999; 64 FR 72895, Dec. 29, 1999; 66 FR 2202, Jan. 11, 2001]
Sec. 225.3 Administration.
(a) Responsibility within the Department. FNS shall act on behalf of
the Department in the administration of the Program.
(b) State administered programs. Within the State, responsibility
for the administration of the Program shall be in the State agency. Each
State agency must notify the Department by November 1 of the fiscal year
regarding its intention to administer the Program. Each State agency
desiring to take part in the Program shall enter into a written
agreement with FNS for the administration of the Program in accordance
with the provisions of this part. The agreement shall cover the
operation of the Program during the period specified therein and may be
extended by written consent of both parties. The agreement shall contain
an assurance that the State agency will comply with the Department's
nondiscrimination regulations (7 CFR part 15) issued under title VI of
the Civil Rights Act of 1964, and any Instructions issued by FNS
pursuant to those regulations, title IX of the Education Amendments of
1972, and section 504 of the Rehabilitation Act of 1973. However, if a
State educational agency is not permitted by law to disburse funds to
any of the nonpublic schools in the State, the Secretary shall disburse
the funds directly to such schools within the State for the same
purposes and subject to the same conditions as the disbursements to
public schools within the State by the State educational agency.
(c) Regional office administered programs. The Secretary shall not
administer the Program in the States, except that if a FNSRO has
continuously administered the Program in any State since October 1,
1980, FNS shall continue to administer the Program in that State. In
States in which FNSRO administers the Program, it shall have all of the
responsibilities of a State agency and shall earn State administrative
and Program funds as set forth in this part. A State in which FNS
administers the Program may, upon request to FNS, assume administration
of the Program.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13466, Apr. 10, 1990;
64 FR 72483, Dec. 28, 1999]
Subpart B_State Agency Provisions
Sec. 225.4 Program management and administration plan.
(a) Not later than February 15 of each year, each State agency shall
submit to FNSRO a Program management and administration plan for that
fiscal year.
(b) Each plan shall be acted on or approved by March 15 or, if it is
submitted late, within 30 calendar days of receipt of the plan. If the
plan initially submitted is not approved, the State agency and FNS shall
work together to ensure that changes to the plan, in the form of
amendments, are submitted so that the plan can be approved within 60
calendar days following the initial submission of the plan. Upon
approval of the plan, the State agency shall be notified of the level of
State administrative funding which it is assured of receiving under
Sec. 225.5(a)(3).
(c) Approval of the Plan by FNS shall be a prerequisite to the
withdrawal of
[[Page 120]]
Program funds by the State from the Letter of Credit and to the donation
by the Department of any commodities for use in the State's Program.
(d) The Plan must include, at a minimum, the following information:
(1) The State's administrative budget for the fiscal year, and the
State's plan to comply with any standards prescribed by the Secretary
for the use of these funds;
(2) The State's plan for use of Program funds and funds from within
the State to the maximum extent practicable to reach needy children;
(3) The State's plans for providing technical assistance and
training to eligible sponsors;
(4) The State's plans for monitoring and inspecting sponsors,
feeding sites, and food service management companies and for ensuring
that such companies do not enter into contracts for more meals than they
can provide effectively and efficiently;
(5) The State's plan for timely and effective action against Program
violators;
(6) The State's plan for ensuring the fiscal integrity of sponsors
not subject to auditing requirements prescribed by the Secretary;
(7) The State's plan for ensuring compliance with the food service
managment company procurement monitoring requirements set forth at Sec.
225.6(h); and
(8) An estimate of the State's need, if any, for monies available to
pay for the cost of conducting health inspections and meal quality
tests.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13466, Apr. 10, 1990;
64 FR 72483, Dec. 28, 1999]
Sec. 225.5 Payments to State agencies and use of Program funds.
(a) State administrative funds--(1) Administrative funding formula.
For each fiscal year, FNS shall pay to each State agency for
administrative expenses incurred in the Program an amount equal to
(i) 20 percent of the first $50,000 in Program funds properly
payable to the State in the preceding fiscal year;
(ii) 10 percent of the next $100,000 in Program funds properly
payable to the State in the preceding fiscal year;
(iii) 5 percent of the next $250,000 in Program funds properly
payable to the State in the preceding fiscal year; and
(iv) 2\1/2\ percent of any remaining Program funds properly payable
to the State in the preceding fiscal year,
Provided, however, That FNS may make appropriate adjustments in the
level of State administrative funds to reflect changes in Program size
from the preceding fiscal year as evidenced by information submitted in
the State Program management and administration plan and any other
information available to FNS. If a State agency fails to submit timely
and accurate reports under Sec. 225.8(c) of this part, State
administrative funds payable under this paragraph shall be subject to
sanction. For such failure, FNS may recover, withhold, or cancel payment
of up to one hundred percent of the funds payable to the State agency
under this paragraph during the fiscal year.
(2) Use of State administrative funds. State administrative funds
paid to any State shall be used by State agencies to employ personnel,
including travel and related expenses, and to supervise and give
technical assistance to sponsors in their initiation, expansion, and
conduct of any food service for which Program funds are made available.
State agencies may also use administrative funds for such other
administrative expenses as are set forth in their approved Program
management and administration plan.
(3) Funding assurance. At the time FNS approves the State's
management and administration plan, the State shall be assured of
receiving State administrative funding equal to the lesser of the
following amounts: 80 percent of the amount obtained by applying the
formula set forth in paragraph (a)(1) of this section to the total
amount of Program payments made within the State during the prior fiscal
year; or, 80 percent of the amount obtained by applying the formula set
forth in paragraph (a)(1) to the amount of Program funds estimated to be
needed in the management and administration plan. The State agency shall
be assured that it will receive no less than this level unless FNS
determines that the State agency has failed or is failing to meet its
responsibilities under this part.
[[Page 121]]
(4) Limitation. In no event may the total payment for State
administrative costs in any fiscal year exceed the total amount of
expenditures incurred by the State agency in administering the Program.
(b) State administrative funds Letter of Credit. (1) At the
beginning of each fiscal year, FNS shall make available to each
participating State agency by Letter of Credit an initial allocation of
State administrative funds for use in that fiscal year. This allocation
shall not exceed one-third of the administrative funds provided to the
State in the preceding fiscal year. For State agencies which did not
receive any Program funds during the preceding fiscal year, the amount
to be made available shall be determined by FNS.
(2) Additional State administrative funds shall be made available
upon the receipt and approval by FNS of the State's Program management
and administration plan. The amount of such funds, plus the initial
allocation, shall not exceed 80 percent of the State administrative
funds determined by the formula set forth in paragraph (a)(1) of this
section and based on the estimates set forth in the approved Program
management and administration plan.
(3) Any remaining State administrative funds shall be paid to each
State agency as soon as practicable after the conduct of the funding
assessment described in paragraph (c) of this section. However,
regardless of whether such assessment is made, the remaining
administrative funds shall be paid no later than September 1. The
remaining administrative payment shall be in an amount equal to that
determined to be needed during the funding evaluation or, if such
evaluation is not conducted, the amount owed the State in accordance
with paragraph (a)(1) of this section, less the amounts paid under
paragraphs (b) (1) and (2) of this section.
(c) Administrative funding evaluation. FNSRO shall conduct data on
the need for Program and State administrative funding within any State
agency if the funding needs estimated in a State's management and
administration plan are no longer accurate. Based on this data, FNS may
make adjustments in the level of State administrative funding paid or
payable to the State agency under paragraph (b) of this section to
reflect changes in the size of the State's Program as compared to that
estimated in its management and administration plan. The data shall be
based on approved Program participation levels and shall be collected
during the period of Program operations. As soon as possible following
this data collection, payment of any additional administrative funds
owed shall be made to the State agency. The payment may reflect
adjustments made to the level of State administrative funding based on
the information collected during the funding assessment. However, FNS
shall not decrease the amount of a State's administrative funds as a
result of this assessment unless the State failed to make reasonable
efforts to administer the Program as proposed in its management and
administration plan or the State incurred unnecessary expenses.
(d) Letter of Credit for Program payments. (1) Not later than April
15 of each fiscal year, FNS shall make available to each participating
State in a Letter of Credit an amount equal to 65 percent of the
preceding fiscal year's Program payments for operating costs plus 65
percent of the preceding fiscal year's Program payments for
administrative costs in the State. This amount may be adjusted to
reflect changes in reimbursement rates made pursuant to Sec.
225.9(d)(8). However, the State shall not withdraw funds from this
Letter of Credit until its Program management and administration plan is
approved by FNS.
(2) Based on the State agency's approved management and
administration plan, FNS shall, if necessary, adjust the State's Letter
of Credit to ensure that 65 percent of estimated current year Program
operating and administrative funding needs is available. Such adjustment
shall be made no later than May 15, or within 90 days of FNS receipt of
the State agency's management and administration plan, whichever date is
later.
(3) Subsequent to the adjustment provided for in paragraph (d)(2) of
this section, FNS will, if necessary, make one additional adjustment to
ensure that the State agency's Letter of Credit contains at least 65
percent of the
[[Page 122]]
Program operating and administrative funds needed during the current
fiscal year. Such adjustment may be based on the administrative funding
assessment provided for in paragraph (c) of this section, if one is
conducted, or on any additional information which demonstrates that the
funds available in the Letter of Credit do not equal at least 65 percent
of current year Program needs. In no case will such adjustments be made
later than September 1. Funds made available in the Letter of Credit
shall be used by the State agency to make Program payments to sponsors.
(4) The Letter of Credit shall include sufficient funds to enable
the State agency to make advance payments to sponsors serving areas in
which schools operate under a continuous school calendar. These funds
shall be made available no later than the first day of the month prior
to the month during which the food service will be conducted.
(5) FNS shall make available any remaining Program funds due within
45 days of the receipt of valid claims for reimbursement from sponsors
by the State agency. However, no payment shall be made for claims
submitted later than 60 days after the month covered by the claim unless
an exception is granted by FNS.
(6) Each State agency shall release to FNS any Program funds which
it determines are unobligated as of September 30 of each fiscal year.
Release of funds by the State agency shall be made as soon as
practicable, but in no event later than 30 calendar days following
demand by FNS, and shall be accomplished by an adjustment in the State
agency's Letter of Credit.
(e) Adjustment to Letter of Credit. Prior to May 15 of each fiscal
year, FNS shall make any adjustments necessary in each State's Letter of
Credit to reflect actual expenditures in the preceding fiscal year's
Program.
(f) Health inspection funds. If the State agency's approved
management and administration plan estimates a need for health
inspection funding, FNS shall make available by letter of credit an
amount up to one percent of Program funds estimated to be needed in the
management and administration plan. Such amount may be adjusted, based
on the administrative funding assessment provided for in paragraph (c)
of this section, if such assessment is conducted. Health inspection
funds shall be used solely to enable State or local health departments
or other governmental agencies charged with health inspection functions
to carry out health inspections and meal quality tests, provided that if
these agencies cannot perform such inspections or tests, the State
agency may use the funds to contract with an independent agency to
conduct the inspection or meal quality tests. Funds so provided but not
expended or obligated shall be returned to the Department by September
30 of the same fiscal year.
Sec. 225.6 State agency responsibilities.
(a) General responsibilities. (1) The State agency shall provide
sufficient qualified consultative, technical, and managerial personnel
to administer the Program, monitor performance, and measure progress in
achieving Program goals. The State agency shall assign Program
responsibilities to personnel to ensure that all applicable requirements
under this part are met.
(2) By February 1 of each fiscal year, each State agency shall
announce the purpose, eligibility criteria, and availability of the
Program throughout the State, through appropriate means of
communication. As part of this effort, each State agency shall identify
rural areas, Indian tribal territories, and areas with a concentration
of migrant farm workers which qualify for the Program and actively seek
eligible applicant sponsors to serve such areas. State agencies shall
identify priority outreach areas in accordance with FNS guidance and
target outreach efforts in these areas. State agencies shall identify
priority outreach areas in accordance with FNS guidance and target
outreach efforts in these areas.
(3) Each State agency shall require applicant sponsors submitting
Program application site information sheets, Program agreements, or a
request for advance payments, and sponsors submitting claims for
reimbursement to certify that the information submitted on these forms
is true and correct and that the sponsor is aware that deliberate
misrepresentation or withholding
[[Page 123]]
of information may result in prosecution under applicable State and
Federal statutes.
(4) In addition to the warnings specified in paragraph (a)(3) of
this section, State agencies may include the following information on
applications and pre-application materials distributed to prospective
sponsors:
(i) The criminal penalties and provisions established in section
12(g) of the National School Lunch Act (42 U.S.C. 1760(g)) that states
substantially: Whoever embezzles, willfully misapplies, steals, or
obtains by fraud any funds, assets, or property that are the subject of
a grant or other form of assistance under this Act or the Child
Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), whether received
directly or indirectly from the United States Department of Agriculture,
or whoever receives, conceals, or retains such funds, assets, or
property to personal use or gain, knowing such funds, assets, or
property have been embezzled, willfully misapplied, stolen, or obtained
by fraud shall, if such funds, assets, or property are of the value of
$100 or more, be fined not more than $25,000 or imprisoned not more than
five years, or both, or, if such funds, assets, or property are of a
value of less than $100, shall be fined not more than $1,000 or
imprisoned for not more than one year, or both.
(ii) The procedures for termination from Program participation of
any site or sponsor which is determined to be seriously deficient in its
administration of the Program. In addition, the application may also
state that appeals of sponsor or site terminations will follow
procedures mandated by the State agency and will also meet the minimum
requirements of 7 CFR 225.13.
(b) Approval of sponsor applications. (1) Each State agency must
inform all of the previous year's sponsors which meet current
eligibility requirements and all other potential sponsors of the
deadline date for submitting a written application for participation in
the Program. The State agency must require that all applicant sponsors
submit written applications for Program participation to the State
agency by June 15. However, the State agency may establish an earlier
deadline for the Program application submission.Sponsors applying for
participation in the Program due to an unanticipated school closure
during the period from October through April (or at any time of the year
in an area with a continuous school calendar) shall be exempt from the
application submission deadline.
(2) Each State agency shall inform potential sponsors of the
procedure for applying for advance operating and administrative costs
payments as provided for in Sec. 225.9(c). Where applicable, each State
agency shall inform sponsors of the procedure for applying for start-up
payments provided for in Sec. 225.9(a).
(3) Within 30 days of receiving a complete and correct application,
the State agency shall notify the applicant of its approval or
disapproval. If an incomplete application is received, the State agency
shall so notify the applicant within 15 days and shall provide technical
assistance for the purpose of completing the application. Any
disapproved applicant shall be notified of its right to appeal under
Sec. 225.13.
(4) The State agency shall determine the eligibility of sponsors
applying for participation in the Program in accordance with the
applicant sponsor eligibility criteria outlined in Sec. 225.14.
However, State agencies may approve the application of an otherwise
eligible applicant sponsor which does not provide a year-round service
to the community which it proposes to serve under the Program only if it
meets one or more of the following criteria: It is a residential camp;
it proposes to provide a food service for the children of migrant
workers; a failure to do so would deny the Program to an area in which
poor economic conditions exist; a significant number of needy children
will not otherwise have reasonable access to the Program; or it proposes
to serve an area affected by an unanticipated school closure during the
period from October through April (or at any time of the year in an area
with a continuous school calendar). In addition, the State agency may
approve a sponsor for participation during an unanticipated school
closure without a prior application if the sponsor participated in the
program at any time during the
[[Page 124]]
current year or in either of the prior two calendar years.
(5) The State agency must use the following priority system in
approving applicants to operate sites that propose to serve the same
area or the same enrolled children:
(i) Public or nonprofit private school food authorities;
(ii) Public agencies and private nonprofit organizations that have
demonstrated successful program performance in a prior year;
(iii) New public agencies; and
(iv) New private nonprofit organizations.
(v) If two or more sponsors that qualify under paragraph (b)(5)(ii)
of this section apply to serve the same area, the State agency must
determine on a case-by-case basis which sponsor or sponsors it will
select to serve the needy children in the area. The State agency should
consider the resources and capabilities of each applicant.
(6) The following limitations apply on the number of sites and
children that may be served per day:
(i) The State agency must not approve any school food authority or
public agency to operate more than 200 sites or to serve more than an
average of 50,000 children per day. However, the State agency may
approve exceptions if the applicant can demonstrate that it has the
capability of managing a program larger than these limits.
(ii) The State agency must not approve any private nonprofit
organization to operate more than 25 sites. In addition, the State
agency must not approve any private nonprofit organization to serve more
than 300 children at any one site for any approved meal service.
However, the State agency may grant a waiver to allow up to 500 children
served at any one site operated by a private nonprofit organization. To
be approved for the waiver, the private nonprofit organization must
demonstrate that it is fully capable of managing a site with more than
300 children and that there are no other sponsors capable of serving the
children in excess of 300.
(7) The State agency shall review each applicant's administrative
budget as a part of the application approval process in order to assess
the applicant's ability to operate in compliance with these regulations
within its projected reimbursement. In approving the applicant's
administrative budget, the State agency shall take into consideration
the number of sites and children to be served, as well as any other
relevant factors. A sponsor's administrative budget shall be subject to
review for adjustments by the State agency if the sponsor's level of
site participation or the number of meals served to children changes
significantly.
(8) Applicants which qualify as camps shall be approved for
reimbursement only for meals served free to enrolled children who meet
the Program's eligibility standards.
(9) The State agency shall not approve the application of any
applicant sponsor identifiable through its organization or principals as
a sponsor which has been determined to be seriously deficient as
described in Sec. 225.11(c). However, the State agency may approve the
application of a sponsor which has been disapproved or terminated in
prior years in accordance with this paragraph if the applicant
demonstrates to the satisfaction of the State agency that it has taken
appropriate corrective actions to prevent recurrence of the
deficiencies.
(10) If the sponsor's application to participate is denied, the
official making the determination of denial must notify the applicant
sponsor in writing stating all of the grounds on which the State agency
based the denial. Pending the outcome of a review of a denial, the State
agency shall proceed to approve other applicants in accordance with its
responsibilities under paragraph (b)(5) of this section, without regard
to the application under review.
(11) The State agency shall not approve the application of any
applicant sponsor which submits fraudulent information or documentation
when applying for Program participation or which knowingly withholds
information that may lead to the disapproval of its application.
Complete information regarding such disapproval of an applicant shall be
submitted by the State agency through FNSRO to OIG.
(c) Content of sponsor application.--(1) Application forms. The
applicant shall
[[Page 125]]
submit a written application to the State agency for participation in
the Program as a sponsor. Sponsors proposing to serve an area affected
by an unanticipated school closure during the period from October
through April (or at any time of the year in an area with a continuous
school calendar) may be exempt, at the discretion of the State agency,
from submitting a new application if they have participated in the
program at any time during the current year or in either of the prior
two calendar years. The State agency may use the application form
developed by FNS, or it may develop an application form, for use in the
Program. Application shall be made on a timely basis in accordance with
the deadline date established under Sec. 225.6(b)(1).
(2) Requirements for new sponsors, new sites, and, as determined by
the State agency, sponsors and sites which have experienced significant
operational problems in the prior year.--(i) Site information sheets. At
a minimum, the application submitted by new sponsors and by sponsors
which, in the determination of the State agency, have experienced
significant operational problems in the prior year shall include a site
information sheet, as developed by the State agency, for each site where
a food service operation is proposed. The site information sheet for new
sponsors and new sites, and for sponsors and sites which, in the
determination of the State agency, have experienced significant
operational problems in the current year must demonstrate or describe
the following:
(A) An organized and supervised system for serving meals to
attending children;
(B) The estimated number and types of meals to be served and the
times of service;
(C) Arrangements, within standards prescribed by the State or local
health authorities, for delivery and holding of meals until time of
service, and arrangements for storing and refrigerating any leftover
meals until the next day;
(D) Arrangements for food service during periods of inclement
weather;
(E) Access to a means of communication for making necessary
adjustments in the number of meals delivered in accordance with the
number of children attending daily at each site;
(F) Whether the site is rural, as defined in Sec. 225.2, or non-
rural, and whether the site's food service will be self-prepared or
vended;
(G) For open sites and restricted open sites, documentation
supporting the eligibility of each site as serving an area in which poor
economic conditions exist. However, for sites that a sponsor proposes to
serve during an unanticipated school closure during the period from
October through April (or at any time of the year in an area with a
continuous school calendar), any site which has participated in the
Program at any time during the current year or in either of the prior
two calendar years shall be considered eligible without new
documentation;
(H) For closed enrolled sites, the projected number of children
enrolled and the projected number of children eligible for free and
reduced price meals for each of these sites;
(I) For NYSP sites, certification from the sponsor that all of the
children who will receive Program meals are enrolled participants in the
NYSP;
(J) For camps, the number of children enrolled in each session who
meet the Program's income standards. If such information is not
available at the time of application, it shall be submitted as soon as
possible thereafter and in no case later than the filing of the camp's
claim for reimbursement for each session;
(K) For those sites at which applicants will serve children of
migrant workers, certification from a migrant organization which attests
that the site serves children of migrant worker families. If the site
also serves non-migrant children, the sponsor shall certify that the
site predominantly serves migrant children; and
(L) For a site that serves homeless children, information sufficient
to demonstrate that the site is not a residential child care
institution, as defined in paragraph (c) of the definition of school in
Sec. 210.2 of this chapter. If cash payments, food stamps, or any in-
kind service are required of any meal recipient at these sites, sponsors
must describe the method(s) used to ensure that no such payments or
services are
[[Page 126]]
received for any Program meal served to children. In addition, sponsors
must certify that such sites employ meal counting methods which ensure
that reimbursement is claimed only for meals served to children.
(ii) Other application requirements. New sponsors and sponsors which
in the determination of the State agency have experienced significant
operational problems in the prior year shall also include in their
applications:
(A) Information in sufficient detail to enable the State agency to
determine whether the applicant meets the criteria for participation in
the Program as set forth in Sec. 225.14; the extent of Program payments
needed, including a request for advance payments and start-up payments,
if applicable; and a staffing and monitoring plan;
(B) A complete administrative and operating budget for State agency
review and approval. The administrative budget shall contain the
projected administrative expenses which a sponsor expects to incur
during the operation of the Program, and shall include information in
sufficient detail to enable the State agency to assess the sponsor's
ability to operate the Program within its estimated reimbursement. A
sponsor's approved administrative budget shall be subject to subsequent
review by the State agency for adjustments in projected administrative
costs;
(C) A summary of how meals will be obtained (e.g., self-prepared at
each site, self-prepared and distributed from a central kitchen,
purchased from a school food authority, competitively procured from a
food service management company, etc.). If an invitation for bid is
required under Sec. 225.15(g), sponsors shall also submit a schedule
for bid dates, and a copy of their invitation for bid; and
(D) For each applicant which seeks approval under Sec. 225.14(b)(3)
as a unit of local, municipal, county or State government, or under
Sec. 225.14(b)(5) as a private nonprofit organization, certification
that it will directly operate the Program in accordance with Sec.
225.14(d)(3).
(3) Requirements for experienced sponsors and experienced sites.--
(i) Site information sheets. At a minimum, the application submitted by
experienced sponsors shall include a site information sheet, as
developed by the State agency, for each site where a food service
operation is proposed. The site information sheet for experienced
sponsors and experienced sites must demonstrate or describe the
information below. The State agency also may require experienced
sponsors and experienced sites to provide any of the information
required in paragraph (c)(2) of this section.
(A) The estimated number and types of meals to be served and the
times of service;
(B) For open sites and restricted open sites, new documentation
supporting the eligibility of each site as serving an area in which poor
economic conditions exist shall be submitted. Such documentation shall
be submitted every three years when school data are used. When census
data are used, such documentation shall be submitted when new census
data are available, or earlier if the State agency believes that an
area's socioeconomic status has changed significantly since the last
census. For sites that a sponsor proposes to serve during an
unanticipated school closure during the period from October through
April (or at any time of the year in an area with a continuous school
calendar), any site which has participated in the Program at any time
during the current year or in either of the prior two calendar years
shall be considered eligible without new documentation of serving an
area in which poor economic conditions exist;
(C) For closed enrolled sites, the projected number of children
enrolled and the projected number of children eligible for free and
reduced price school meals for each of these sites; and
(D) For camps, the number of children enrolled in each session who
meet the Program's income standards. If such information is not
available at the time of application, it shall be submitted as soon as
possible thereafter and in no case later than the filing of the camp's
claim for reimbursement for each session.
(ii) Other application requirements. Experienced sponsors shall also
include on their applications:
[[Page 127]]
(A) The extent of Program payments needed, including a request for
advance payments and start-up payments, if applicable, and a staffing
and monitoring plan;
(B) A complete administrative and operating budget for State agency
review and approval. The administrative budget shall contain the
projected administrative expenses which a sponsor expects to incur
during the operation of the Program, and shall include information in
sufficient detail to enable the State agency to assess the sponsor's
ability to operate the Program within its estimated reimbursement. A
sponsor's approved administrative budget shall be subject to subsequent
review by the State agency for adjustments in projected administrative
costs; and
(C) If an invitation for bid is required under Sec. 225.15(g), a
schedule for bid dates. Sponsors shall also submit a copy of the
invitation for bid if it is changed from the previous year. If the
method of procuring meals is changed, sponsors shall submit a summary of
how meals will be obtained (e.g., self-prepared at each site, self-
prepared and distributed from a central kitchen, purchased from a school
food authority, competitively procured from a food service management
company, etc.).
(4) Free meal policy statement. (i) Each applicant must submit a
statement of nondiscrimination in its policy for serving meals to
children. The statement must consist of an assurance that all children
are served the same meals and that there is no discrimination in the
course of the food service. A school sponsor must submit the policy
statement only once, with the initial application to participate as a
sponsor. However, if there is a substantive change in the school's free
and reduced price policy, a revised policy statement must be provided at
the State agency's request. In addition to the policy of service/
nondiscrimination statement described in paragraph (c)(3) of this
section, all applicants except camps must include a statement that the
meals served are free at all sites.
(ii) In addition to the policy of service/nondiscrimination
statement described in paragraph (c)(3) of this section, all applicants
that are camps that charge separately for meals must include the
following:
(A) A statement that the eligibility standards conform to the
Secretary's family size and income standards for reduced price school
meals;
(B) A description of the method or methods to be used in accepting
applications from families for Program meals. Such methods must ensure
that households are permitted to apply on behalf of children who are
members of households receiving food stamp, FDPIR, or TANF benefits
using the categorical eligibility procedures described in
Sec. 225.15(f);
(C) A description of the method used by camps for collecting
payments from children who pay the full price of the meal while
preventing the overt identification of children receiving a free meal;
(D) An assurance that the camp will establish a hearing procedure
for families wishing to appeal a denial of an application for free
meals. Such hearing procedures shall meet the requirements set forth in
paragraph (c)(5) of this section;
(E) An assurance that, if a family requests a hearing, the child
shall continue to receive free meals until a decision is rendered; and
(F) An assurance that there will be no overt identification of free
meal recipients and no discrimination against any child on the basis of
race, color, national origin, sex, age, or handicap.
(5) Hearing procedures statement.Each applicant that is a camp shall
submit with its application a copy of its hearing procedures. At a
minimum, these procedures shall provide:
(i) That a simple, publicly announced method will be used for a
family to make an oral or written request for a hearing;
(ii) That the family will have the opportunity to be assisted or
represented by an attorney or other person;
(iii) That the family will have an opportunity to examine the
documents and records supporting the decision being appealed both before
and during the hearing;
(iv) That the hearing will be reasonably prompt and convenient for
the family;
[[Page 128]]
(v) That adequate notice will be given to the family of the time and
place of the hearing;
(vi) That the family will have an opportunity to present oral or
documentary evidence and arguments supporting its position;
(vii) That the family will have an opportunity to question or refute
any testimony or other evidence and to confront and cross-examine any
adverse witnesses;
(viii) That the hearing shall be conducted and the decision made by
a hearing official who did not participate in the action being appealed;
(ix) That the decision shall be based on the oral and documentary
evidence presented at the hearing and made a part of the record;
(x) That the family and any designated representative shall be
notified in writing of the decision;
(xi) That a written record shall be prepared for each hearing which
includes the action being appealed, any documentary evidence and a
summary of oral testimony presented at the hearing, the decision and the
reasons for the decision, and a copy of the notice sent to the family;
and
(xii) That the written record shall be maintained for a period of
three years following the conclusion of the hearing, during which it
shall be available for examination by the family or its representatives
at any reasonable time and place.
(d) Approval of sites. (1) When evaluating a proposed food service
site, the State agency shall ensure that:
(i) If not a camp, the proposed site serves an area in which poor
economic conditions exist, as defined by Sec. 225.2;
(ii) The area which the site proposes to serve is not or will not be
served in whole or in part by another site, unless it can be
demonstrated to the satisfaction of the State agency that each site will
serve children not served by any other site in the same area for the
same meal;
(iii) The site is approved to serve no more than the number of
children for which its facilities are adequate and;
(iv) If it is a site proposed to operate during an unanticipated
school closure, it is a non-school site.
(2) When approving the application of a site which will serve meals
prepared by a food service management company, the State agency shall
establish for each meal service an approved level for the maximum number
of children's meals which may be served under the Program. These
approved levels shall be established in accordance with the following
provisions:
(i) The initial maximum approved level shall be based upon the
historical record of attendance at the site if such a record has been
established in prior years and the State agency determines that it is
accurate. The State agency shall develop a procedure for establishing
initial maximum approved levels for sites when no accurate record from
prior years is available.
(ii) The maximum approved level shall be adjusted, if warranted,
based upon information collected during site reviews. If attendance at
the site on the day of the review is significantly below the site's
approved level, the State agency should consider making a downward
adjustment in the approved level with the objective of providing only
one meal per child.
(iii) The sponsor may seek an upward adjustment in the approved
level for its sites by requesting a site review or by providing the
State agency with evidence that attendance exceeds the sites' approved
levels.
(iv) Whenever the State agency establishes or adjusts approved
levels of meal service for a site, it shall document the action in its
files, and it shall provide the sponsor with immediate written
confirmation of the approved level.
(v) Upon approval of its application or any adjustment to its
maximum approved levels, the sponsor shall inform the food service
management company with which it contracts of the approved level for
each meal service at each site served by the food service management
company. This notification of any adjustments in approved levels shall
take place within the time frames set forth in the contract for
adjusting meal orders. Whenever the sponsor notifies the food service
management company of the approved levels or any adjustments to these
levels for any of its sites, the sponsor shall clearly inform the food
[[Page 129]]
service management company that an approved level of meal service
represents the maximum number of meals which may be served at a site and
is not a standing order for a specific number of meals at that site.
When the number of children attending is below the site's approved
level, the sponsor shall adjust meal orders with the objective of
serving only one meal per child as required under Sec. 225.15(b)(3).
(e) State-Sponsor Agreement. A sponsor approved for participation in
the Program must enter into a written agreement with the State agency.
If the sponsor is a school food authority that operates more than one
child nutrition program (e.g., the National School Lunch Program, the
School Breakfast Program, or the Child and Adult Care Food Program)
under a single State agency, a single permanent agreement that includes
all the child nutrition programs must be executed with the State agency,
as described in Sec. 210.9(b) of this chapter. All sponsors must agree
in writing to:
(1) Operate a nonprofit food service during the period specified, as
follows:
(i) From May through September for children on school vacation;
(ii) At any time of the year, in the case of sponsors administering
the Program under a continuous school calendar system; or
(iii) During the period from October through April, if it serves an
area affected by an unanticipated school closure due to a natural
disaster, major building repairs, court orders relating to school safety
or other issues, labor-management disputes, or, when approved by the
State agency, a similar cause.
(2) For school food authorities, offer meals which meet the
requirements and provisions set forth in Sec. 225.16 during times
designated as meal service periods by the sponsor, and offer the same
meals to all children;
(3) For all other sponsors, serve meals which meet the requirements
and provisions set forth in Sec. 225.16 during times designated as meal
service periods by the sponsor, and serve the same meals to all
children;
(4) Serve meals without cost to all children, except that camps may
charge for meals served to children who are not served meals under the
Program;
(5) Issue a free meal policy statement in accordance with Sec.
225.6(c);
(6) Meet the training requirement for its administrative and site
personnel, as required under Sec. 225.15(d)(1);
(7) Claim reimbursement only for the type or types of meals
specified in the agreement and served without charge to children at
approved sites during the approved meal service period, except that
camps shall claim reimbursement only for the type or types of meals
specified in the agreement and served without charge to children who
meet the Program's income standards. The agreement shall specify the
approved levels of meal service for the sponsor's sites if such levels
are required under Sec. 225.6(d)(2). No permanent changes may be made
in the serving time of any meal unless the changes are approved by the
State agency;
(8) Submit claims for reimbursement in accordance with procedures
established by the State agency, and those stated in Sec. 225.9;
(9) In the storage, preparation and service of food, maintain proper
sanitation and health standards in conformance with all applicable State
and local laws and regulations;
(10) Accept and use, in quantities that may be efficiently utilized
in the Program, such foods as may be offered as a donation by the
Department;
(11) Have access to facilities necessary for storing, preparing, and
serving food;
(12) Maintain a financial management system as prescribed by the
State agency;
(13) Maintain on file documentation of site visits and reviews in
accordance with Sec. 225.15(d) (2) and (3);
(14) Upon request, make all accounts and records pertaining to the
Program available to State, Federal, or other authorized officials for
audit or administrative review, at a reasonable time and place. The
records shall be retained for a period of 3 years after the end of the
fiscal year to which they pertain, unless audit or investigative
findings have not been resolved, in which case the records shall be
retained until all issues raised by the audit or investigation have been
resolved;
[[Page 130]]
(15) Maintain children on site while meals are consumed; and
(16) Retain final financial and administrative responsibility for
its program.
(f) Special Account. In addition, the State agency may require any
vended sponsor to enter into a special account agreement with the State
agency. The special account agreement shall stipulate that the sponsor
shall establish a special account with a State agency or Federally
insured bank for operating costs payable to the sponsor by the State.
The agreement shall also stipulate that any disbursement of monies from
the account must be authorized by both the sponsor and the food service
management company. The special account agreement may contain such other
terms, agreed to by both the sponsor and the food service management
company, which are consistent with the terms of the contract between the
sponsor and the food service management company. A copy of the special
account agreement shall be submitted to the State agency and another
copy maintained on file by the sponsor. Any charges made by the bank for
the account described in this section shall be considered an allowable
sponsor administrative cost.
(g) Food service management company registration. A State agency may
require each food service management company, operating within the
State, to register based on State procedures. A State agency may further
require the food service management company to certify that the
information submitted on its application for registration is true and
correct and that the food service management company is aware that
misrepresentation may result in prosecution under applicable State and
Federal statutes.
(h) Monitoring of food service management company procurements. (1)
The State agency shall ensure that sponsors' food service management
company procurements are carried out in accordance with Sec. Sec.
225.15(g) and 225.17 of this part.
(2) Each State agency shall develop a standard form of contract for
use by sponsors in contracting with food service management companies.
Sponsors which are public entities, sponsors with exclusive year-round
contracts with a food service management company, and sponsors whose
food service management company contract(s) do not exceed $10,000 in
aggregate value may use their existing or usual form of contract,
provided that such form of contract has been submitted to and approved
by the State agency. The standard contract developed by the State agency
shall expressly and without exception provide that:
(i) All meals prepared by a food service management company shall be
unitized, with or without milk or juice, unless the State agency has
approved, pursuant to paragraph (h)(3) of this section, a request for
exceptions to the unitizing requirement for certain components of a
meal;
(ii) A food service management company entering into a contract with
a sponsor under the Program shall not subcontract for the total meal,
with or without milk, or for the assembly of the meal;
(iii) The sponsor shall provide to the food service management
company a list of State agency approved food service sites, along with
the approved level for the number of meals which may be claimed for
reimbursement for each site, established under Sec. 225.6(d)(2), and
shall notify the food service management company of all sites which have
been approved, cancelled, or terminated subsequent to the submission of
the initial approved site list and of any changes in the approved level
of meal service for a site. Such notification shall be provided within
the time limits mutually agreed upon in the contract;
(iv) The food service management company shall maintain such records
(supported by invoices, receipts, or other evidence) as the sponsor will
need to meet its responsibilities under this part, and shall submit all
required reports to the sponsor promptly at the end of each month,
unless more frequent reports are required by the sponsor;
(v) The food service management company must have State or local
health certification for the facility in which it proposes to prepare
meals for use in the Program. It must ensure that health and sanitation
requirements are met at all times. In addition,
[[Page 131]]
the food service management company must ensure that meals are inspected
periodically to determine bacteria levels present in the meals and that
the bacteria levels found to be present in the meals conform with the
standards set by local health authorities. The results of the
inspections must be submitted promptly to the sponsor and to the State
agency.
(vi) The meals served under the contract shall conform to the cycle
menus and meal quality standards and food specifications approved by the
State agency and upon which the bid was based;
(vii) The books and records of the food service management company
pertaining to the sponsor's food service operation shall be available
for inspection and audit by representatives of the State agency, the
Department and the U.S. General Accounting Office at any reasonable time
and place for a period of 3 years from the date of receipt of final
payment under the contract, except that, if audit or investigation
findings have not been resolved, such records shall be retained until
all issues raised by the audit or investigation have been resolved;
(viii) The sponsor and the food service management company shall
operate in accordance with current Program regulations;
(ix) The food service management company shall be paid by the
sponsor for all meals delivered in accordance with the contract and this
part. However, neither the Department nor the State agency assumes any
liability for payment of differences between the number of meals
delivered by the food service management company and the number of meals
served by the sponsor that are eligible for reimbursement;
(x) Meals shall be delivered in accordance with a delivery schedule
prescribed in the contract;
(xi) Increases and decreases in the number of meals ordered shall be
made by the sponsor, as needed, within a prior notice period mutually
agreed upon;
(xii) All meals served under the Program shall meet the requirements
of Sec. 225.16;
(xiii) In cases of nonperformance or noncompliance on the part of
the food service management company, the company shall pay the sponsor
for any excess costs which the sponsor may incur by obtaining meals from
another source;
(xiv) If the State agency requires the sponsor to establish a
special account for the deposit of operating costs payments in
accordance with the conditions set forth in Sec. 225.6(f), the contract
shall so specify;
(xv) The food service management company shall submit records of all
costs incurred in the sponsor's food service operation in sufficient
time to allow the sponsor to prepare and submit the claim for
reimbursement to meet the 60-day submission deadline; and
(xvi) The food service management company shall comply with the
appropriate bonding requirements, as set forth in Sec. 225.15(g) (6)-
(8).
(3) All meals prepared by a food service management company shall be
unitized, with or without milk or juice, unless the sponsor submits to
the State agency a request for exceptions to the unitizing requirement
for certain components of a meal. These requests shall be submitted to
the State agency in writing in sufficient time for the State agency to
respond prior to the sponsor's advertising for bids. The State agency
shall notify the sponsor in writing of its determination in a timely
manner.
(4) Each State agency shall have a representative present at all
food service management company procurement bid openings when sponsors
are expected to receive more than $100,000 in Program payments.
(5) Copies of all contracts between sponsors and food service
management companies, along with a certification of independent price
determination, shall be submitted to the State agency prior to the
beginning of Program operations. Sponsors shall also submit to the State
agency copies of all bids received and their reason for selecting the
food service management company chosen.
(6) All bids in an amount which exceeds the lowest bid shall be
submitted to the State agency for approval before acceptance. All bids
totaling $100,000 or more shall be submitted to the State
[[Page 132]]
agency for approval before acceptance. State agencies shall respond to a
request for approval of such bids within 5 working days of receipt.
(7) Failure by a sponsor to comply with the provisions of this
paragraph or Sec. 225.15(g)(1) shall be sufficient grounds for the
State agency to terminate participation by the sponsor in accordance
with Sec. 225.18(b).
(i) Meal pattern exceptions. The State agency shall review and act
upon requests for exceptions to the meal pattern in accordance with the
guidelines and limitations set forth in Sec. 225.16.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13467, Apr. 10, 1990; ;
64 FR 72484, Dec. 28, 1999; 64 FR 72896, Dec. 29, 1999]
Sec. 225.7 Program monitoring and assistance.
(a) Training. Prior to the beginning of Program operations, each
State agency shall make available training in all necessary areas of
Program administration to sponsor personnel, food service management
company representatives, auditors, and health inspectors who will
participate in the Program in that State. Prior to Program operations,
the State agency shall ensure that the sponsor's supervisory personnel
responsible for the food service receive training in all necessary areas
of Program administration and operations. This training shall reflect
the fact that individual sponsors or groups of sponsors require
different levels and areas of Program training. State agencies are
encouraged to utilize in such training, and in the training of site
personnel, sponsor personnel who have previously participated in the
Program. Training should be made available at convenient locations.
State agencies are not required to conduct this training for sponsors
operating the Program during unanticipated school closures during the
period from October through April (or at any time of the year in an area
with a continuous school calendar).
(b) Program materials. Each State agency shall develop and make
available all necessary Program materials in sufficient time to enable
applicant sponsors to prepare adequately for the Program.
(c) Food specifications and meal quality standards. With the
assistance of the Department, each State agency shall develop and make
available to all sponsors minimum food specifications and model meal
quality standards which shall become part of all contracts between
vended sponsors and food service management companies.
(d) Program monitoring and assistance. The State agency shall
conduct Program monitoring and provide Program assistance according to
the following provisions:
(1) Pre-approval visits. The State agency shall conduct pre-approval
visits of sponsors and sites, as specified below, to assess the
applicant sponsor's or site's potential for successful Program
operations and to verify information provided in the application. The
State agency shall visit prior to approval:
(i) All applicant sponsors which did not participate in the program
in the prior year. However, if a sponsor is a school food authority, has
been reviewed by the State agency under the National School Lunch
Program during the preceding 12 months, and had no significant
deficiencies noted in that review, a pre-approval visit may be conducted
at the discretion of the State agency. In addition, pre-approval visits
of sponsors proposing to operate the Program during unanticipated school
closures during the period from October through April (or at any time of
the year in an area with a continuous school calendar) may be conducted
at the discretion of the State agency;
(ii) All applicant sponsors which, as a result of operational
problems noted in the prior year, the State agency has determined need a
pre-approval visit; and
(iii) All sites which the State agency has determined need a pre-
approval visit.
(2) Sponsor and site reviews--(i) General. The State agency must
review sponsors and sites to ensure compliance with Program regulations,
the Department's non-discrimination regulations (7 CFR part 15) and any
other applicable instructions issued by the Department. In determining
which sponsors and sites to review, the State agency must, at a minimum,
consider
[[Page 133]]
the sponsors' and sites' previous participation in the Program, their
current and previous Program performance, and the results of previous
reviews of the sponsor and sites. When the same school food authority
personnel administer this Program as well as the National School Lunch
Program (7 CFR part 210), the State agency is not required to conduct a
review of the Program in the same year in which the National School
Lunch Program operations have been reviewed and determined to be
satisfactory. Reviews shall be conducted as follows:
(ii) Frequency and number of required reviews. State agencies shall:
(A) Conduct a review of every new sponsor at least once during the
first year of operation;
(B) Annually review a number of sponsors whose program
reimbursements, in the aggregate, accounted for at least one-half of the
total program meal reimbursements in the State in the prior year;
(C) Annually review every sponsor which experienced significant
operational problems in the prior year;
(D) Review each sponsor at least once every three years; and
(E) As part of each sponsor review, conduct reviews of at least 10
percent of each sponsor's sites, or one site, whichever number is
greater.
(3) Follow-up reviews. The State agency shall conduct follow-up
reviews of sponsors and sites as necessary.
(4) Monitoring system. Each State agency shall develop and implement
a monitoring system to ensure that sponsors, including site personnel,
and the sponsor's food service management company, if applicable,
immediately receive a copy of any review reports which indicate Program
violations and which could result in a Program disallowance.
(5) Records. Documentation of Program assistance and the results of
such assistance shall be maintained on file by the State agency.
(6) Food service management company facility visits. As a part of
the review of any vended sponsor which contracts for the preparation of
meals, the State agency shall inspect the food service management
company's facilities. Each State agency shall establish an order of
priority for visiting facilities at which food is prepared for the
Program. The State agency shall respond promptly to complaints
concerning facilities. If a food service management company fails to
correct violations noted by the State agency during a review, the State
agency shall notify the sponsor and the food service management company
that reimbursement shall not be paid for meals prepared by the food
service management company after a date specified in the notification.
Funds provided for in Sec. 225.5(f) may be used for conducting food
service management company facility inspections.
(7) Forms for reviews by sponsors. Each State agency shall develop
and provide monitor review forms to all approved sponsors. These forms
shall be completed by sponsor monitors. The monitor review form shall
include, but not be limited to, the time of the reviewer's arrival and
departure, the site supervisor's signature, a certification statement to
be signed by the monitor, the number of meals prepared or delivered, the
number of meals served to children, the deficiencies noted, the
corrective actions taken by the sponsor, and the date of such actions.
(8) Statistical monitoring. State agencies may use statistical
monitoring procedures in lieu of the site monitoring requirements
prescribed in paragraph (d)(2) of this section to accomplish the
monitoring and technical assistance aspects of the Program. State
agencies which use statistical monitoring procedures may use the
findings in evaluating claims for reimbursement. Statistical monitoring
may be used for some or all of a State's sponsors. Use of statistical
monitoring does not eliminate the requirements for reviewing sponsors as
specified in paragraph (d)(2) of this section.
(9) Corrective actions. Corrective actions which the State agency
may take when Program violations are observed during the conduct of a
review are discussed in Sec. 225.11. The State agency shall conduct
follow-up reviews as appropriate when corrective actions are required.
(e) Other facility inspections and meal quality tests. In addition
to those inspections required by paragraph (d)(6)
[[Page 134]]
of this section, the State agency may also conduct, or arrange to have
conducted: inspections of self-preparation and vended sponsors' food
preparation facilities; inspections of food service sites; and meal
quality tests. The procedures for carrying out these inspections and
tests shall be consistent with procedures used by local health
authorities. For inspections of food service management companies'
facilities not conducted by State agency personnel, copies of the
results shall be provided to the State agency. The company and the
sponsor shall also immediately receive a copy of the results of these
inspections when corrective action is required. If a food service
management company fails to correct violations noted by the State agency
during a review, the State agency shall notify the sponsor and the food
service management company that reimbursement shall not be paid for
meals prepared by the food service management company after a date
specified in the notification. Funds provided for in Sec. 225.5(f) may
be used for conducting these inspections and tests.
(f) Financial management. Each State agency shall establish a
financial management system, in accordance with the Department's Uniform
Financial Assistance Regulations (7 CFR part 3015) and FNS guidance, to
identify allowable Program costs and to establish standards for sponsor
recordkeeping and reporting. The State agency shall provide guidance on
these financial management standards to each sponsor.
(g) Nondiscrimination. (1) Each State agency shall comply with all
requirements of title VI of the Civil Rights Act of 1964, title IX of
the Education Amendments of 1972, section 504 of the Rehabilitation Act
of 1973, the Age Discrimination Act of 1975, and the Department's
regulations concerning nondiscrimination (7 CFR parts 15, 15a and 15b),
including requirements for racial and ethnic participation data
collection, public notification of the nondiscrimination policy, and
reviews to assure compliance with such policy, to the end that no person
shall, on the grounds of race, color, national origin, sex, age, or
handicap, be excluded from participation in, be denied the benefits of,
or be otherwise subjected to discrimination under, the Program.
(2) Complaints of discrimination filed by applicants or participants
shall be referred to FNS or the Secretary of Agriculture, Washington, DC
20250. A State agency which has an established grievance or complaint
handling procedure may resolve sex and handicap discrimination
complaints before referring a report to FNS.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13468, Apr. 10, 1990;
64 FR 72485, Dec. 28, 1999; 64 FR 72898, Dec. 29, 1999]
Sec. 225.8 Records and reports.
(a) Each State agency shall maintain complete and accurate current
accounting records of its Program operations which will adequately
identify funds authorizations, obligations, unobligated balances,
assets, liabilities, income, claims against sponsors and efforts to
recover overpayments, and expenditures for administrative and operating
costs. These records shall be retained for a period of three years after
the date of the submission of the final Program Operations and Financial
Status Report (SF-269), except that, if audit findings have not been
resolved, the affected records shall be retained beyond the three year
period until such time as any issues raised by the audit findings have
been resolved. The State agency shall also retain a complete record of
each review or appeal conducted, as required under Sec. 225.13, for a
period of three years following the date of the final determination on
the review or appeal. Records may be kept in their original form or on
microfilm.
(b) Each State agency shall submit to FNS a final report on the
Summer Food Service Program Operations (FNS-418) for each month no more
than 90 days following the last day of the month covered by the report.
States shall not receive Program funds for any month for which the final
report is not postmarked and/or submitted within this time limit unless
FNS grants an exception. Upward adjustments to a State's report shall
not be made after 90 days from the month covered by the report unless
authorized by FNS. Downward adjustments shall always be made without FNS
authorization, regardless of when it is determined that
[[Page 135]]
such adjustments need to be made. Adjustments to a State's report shall
be reported to FNS in accordance with procedures established by FNS.
Each State agency shall also submit to FNS a quarterly Financial Status
Report (SF-269) on the use of Program funds. Such reports shall be
submitted no later than 30 days after the end of each fiscal year
quarter. Obligations shall be reported only for the fiscal year in which
they occur. Action may be taken against the State agency, in accordance
with Sec. 225.5(a)(1), for failure to submit accurate and timely
reports.
(c) The State agency must submit to FNS a final Financial Status
Report no later than 120 days after the end of the fiscal year, on a
form (SF-269) provided by FNS. Any requested increase in reimbursement
levels for a fiscal year resulting from corrective action taken after
submission of the final Program Operations and Financial Status Reports
shall be submitted to FNS for approval. The request shall be accompanied
by a written explanation of the basis for the adjustment and the actions
taken to minimize the need for such adjustments in the future. If FNS
approves such an increase, it will make payment, subject to availability
of funds. Any reduction in reimbursement for that fiscal year resulting
from corrective action taken after submission of the final fiscal year
Program Operations and Financial Status Reports shall be handled in
accordance with the provisions of Sec. 225.12(d), except that amounts
recovered may not be used to make Program payments.
(d)(1) By May 1 of each year, State agencies must submit to the
appropriate FNSRO a list of potential private nonprofit organization
sponsors. The list must include the following information for each
applicant sponsor:
(i) Name and address;
(ii) Geographical area(s) proposed to be served;
(iii) Proposed number of sites; and
(iv) Any available details of each proposed site including address,
dates of operation, and estimated daily attendance.
(2) State agencies must also notify the appropriate FNSRO within 5
working days after they approve each private nonprofit organization to
participate as a SFSP sponsor. When State agencies notify the FNSRO of
sponsor approval, they must provide the following information:
(i) Any changes to site locations, dates of operation, and estimated
daily attendance that was previously provided;
(ii) The hours and type(s) of approved meal service at each site;
(iii) The type of site approval--open, restricted open, closed
enrolled, or camp; and
(iv) Any other important details about each site that would help the
FNSRO plan reviews, including whether the site is rural or urban, or
vended or self-preparation.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13469, Apr. 10, 1990;
64 FR 72485, Dec. 28, 1999; 65 FR 82251, Dec. 28, 2000]
Sec. 225.9 Program assistance to sponsors.
(a) Start-up payments. At their discretion, State agencies may make
start-up payments to sponsors which have executed Program agreements.
Start-up payments shall not be made more than two months before the
sponsor is scheduled to begin food service operations and shall not
exceed 20 percent of the sponsor's approved administrative budget. The
amount of the start-up payment shall be deducted from the first advance
payment for administrative costs or, if the sponsor does not receive
advance payments, from the first administrative reimbursement.
(b) Commodity assistance. (1) Sponsors eligible to receive
commodities under the Program include: Self-preparation sponsors;
sponsors which have entered into an agreement with a school or school
food authority for the preparation of meals; and sponsors which are
school food authorities and have competitively procured Program meals
from the same food service management company from which they
competitively procured meals for the National School Lunch Program
during the last period in which school was in session. The State agency
shall make available to these sponsors information on available
commodities. Sponsors shall use in the Program food donated by the
Department and accepted by sponsors.
[[Page 136]]
(2) Not later than June 1 of each year, State agencies shall prepare
a list of the sponsors which are eligible to receive commodities and the
average daily number of eligible meals to be served by each of these
sponsors. If the State agency does not handle the distribution of
commodities donated by the Department, this list shall be forwarded to
the agency of the State responsible for the distribution of commodities.
The State agency shall be responsible for promptly revising the list to
reflect additions or terminations of sponsors and for adjusting the
average daily participation data as it deems necessary.
(c) Advance payments. At the sponsor's request, State agencies shall
make advance payments to sponsors which have executed Program agreements
in order to assist these sponsors in meeting operating costs and
administrative expenses. For sponsors operating under a continuous
school calendar, all advance payments shall be forwarded on the first
day of each month of operation. Advance payments shall be made by the
dates specified in paragraphs (c) (1) and (2) of this section for all
other sponsors whose requests are received at least 30 days prior to
those dates. Requests received less than 30 days prior to those dates
shall be acted upon within 30 days of receipt. When making advance
payments, State agencies shall observe the following criteria:
(1) Operating costs. (i) State agencies shall make advance payments
for operating costs by June 1, July 15, and August 15. Except for school
food authorities, sponsors must conduct training sessions before
receiving the second advance payment. Training sessions must cover
Program duties and responsibilities for the sponsor's staff and for site
personnel. A sponsor shall not receive advance operating cost payments
for any month in which it will participate in the Program for less than
ten days.
(ii) To determine the amount of the advance payment to any sponsor,
the State agency shall employ whichever of the following methods will
result in the larger payment:
(A) The total operating costs paid to the sponsor for the same
calendar month in the preceding year; or
(B) For vended sponsors, 50 percent of the amount determined by the
State agency to be needed that month for meals, and, for self-
preparation sponsors, 65 percent of the amount determined by the State
agency to be needed that month for meals.
(2) Administrative costs. (i) State agencies shall make advance
payments for administrative costs by June 1 and July 15. To be eligible
for the second advance payment, the sponsor must certify that it is
operating the number of sites for which the administrative budget was
approved and that its projected administrative costs do not differ
significantly from the approved budget. A sponsor shall not receive
advance administrative costs payments for any month in which it will
participate in the Program for less than 10 days. However, if a sponsor
operates for less than 10 days in June but for at least 10 days in
August, the second advance administrative costs payment shall be made by
August 15.
(ii) Each payment shall equal one-third of the total amount which
the State agency determines the sponsor will need to administer its
program. For sponsors which will operate for 10 or more days in only one
month and, therefore, will qualify for only one advance administrative
costs payment, the payment shall be no less than one-half, and no more
than two-thirds, of the total amount which the State agency determines
the sponsor will need to administer its program.
(3) Advance payment estimates. When determining the amount of
advance payments payable to the sponsor, the State agency shall make the
best possible estimate based on the sponsor's request and any other
available data. Under no circumstances may the amount of the advance
payment for operating or administrative costs exceed the amount
estimated by the State agency to be needed by the sponsor to meet
operating or administrative costs, respectively.
(4) Limit. The sum of the advance operating and administrative costs
payments to a sponsor for any one month shall not exceed $40,000 unless
the State agency determines that a larger payment is necessary for the
effective
[[Page 137]]
operation of the Program and the sponsor demonstrates sufficient
administrative and managerial capability to justify a larger payment.
(5) Deductions from advance payments. The State agency shall deduct
from either advance operating payments or advance administrative
payments the amount of any previous payment which is under dispute or
which is part of a demand for recovery under Sec. 225.12.
(6) Withholding of advance payments. If the State agency has reason
to believe that a sponsor will not be able to submit a valid claim for
reimbursement covering the month for which advance payments have already
been made, the subsequent month's advance payment shall be withheld
until a valid claim is received.
(7) Repayment of excess advance payments. Upon demand of the State
agency, sponsors shall repay any advance Program payments in excess of
the amount cited on a valid claim for reimbursement.
(d) Reimbursements. Sponsors shall not be eligible for
reimbursements for operating and administrative costs unless they have
executed an agreement with the State agency. All reimbursements shall be
in accordance with the terms of this agreement. Reimbursements shall not
be paid for meals served at a site before the sponsor has received
written notification that the site has been approved for participation
in the Program. Income accruing to a sponsor's program shall be deducted
from combined operating and administrative costs. The State agency may
make full or partial reimbursement upon receipt of a claim for
reimbursement, but shall first make any necessary adjustments in the
amount to be paid. The following requirements shall be observed in
submitting and paying claims:
(1) School food authorities that operate the Program, and operate
more than one child nutrition program under a single State agency, must
use a common claim form (as provided by the State agency) for claiming
reimbursement for meals served under those programs.
(2) No reimbursement may be issued until the sponsor certifies that
it operated all sites for which it is approved and that there has been
no significant change in its projected administrative costs since its
preceding claim and, for a sponsor receiving an advance payment for only
one month, that there has been no significant change in its projected
administrative costs since its initial advance administrative costs
payment.
(3) Sponsors which operate less than 10 days in the final month of
operations shall submit a combined claim for the final month and the
immediate preceding month within 60 days of the last day of operation.
(4) The State agency shall forward reimbursements within 45 days of
receiving valid claims. If a claim is incomplete or invalid, the State
agency shall return the claim to the sponsor within 30 days with an
explanation of the reason for disapproval. If the sponsor submits a
revised claim, final action shall be completed within 45 days of
receipt.
(5) Claims for reimbursement shall report information in accordance
with the financial management system established by the State agency,
and in sufficient detail to justify the reimbursement claimed and to
enable the State agency to provide the Reports of Summer Food Service
Program Operations required under Sec. 225.8(b). In submitting a claim
for reimbursement, each sponsor shall certify that the claim is correct
and that records are available to support this claim. Failure to
maintain such records may be grounds for denial of reimbursement for
meals served and/or administrative costs claimed during the period
covered by the records in question. The costs of meals served to adults
performing necessary food service labor may be included in the claim.
Under no circumstances may a sponsor claim the cost of any disallowed
meals as operating costs.
(6) A final Claim for Reimbursement shall be postmarked and/or
submitted to the State agency not later than 60 days after the last day
of the month covered by the claim. State agencies may establish shorter
deadlines at their discretion. Claims not filed within the 60 day
deadline shall not be paid with Program funds unless FNS determines that
an exception should be granted. The State agency shall
[[Page 138]]
promptly take corrective action with respect to any Claim for
Reimbursement as determined necessary through its claim review process
or otherwise. In taking such corrective action, State agencies may make
upward adjustments in Program funds claimed on claims filed within the
60 day deadline if such adjustments are completed within 90 days of the
last day of the month covered by the claim and are reflected in the
final Program Operations Report (FNS-418). Upward adjustments in Program
funds claimed which are not reflected in the final FNS-418 for the month
covered by the claim cannot be made unless authorized by FNS. Downward
adjustments in Program funds claimed shall always be made without FNS
authorization, regardless of when it is determined that such adjustments
are necessary.
(7) Payments to a sponsor for operating costs must equal the lesser
of the following totals:
(i) The actual operating costs incurred by the sponsor; or
(ii) The sum of the amounts derived by multiplying the number of
meals, by type, actually served under the sponsor's program to eligible
children by the current rates for each meal type, as adjusted in
accordance with paragraph (d)(9) of this section.
(8) Payments to a sponsor for administrative costs must equal the
lowest of the following totals:
(i) The amount estimated in the sponsor's approved administrative
budget (taking into account any amendments);
(ii) The actual administrative costs incurred by the sponsor; or
(iii) The sum of the amounts derived by multiplying the number of
meals, by type, actually served under the sponsor's program to eligible
children by the current administrative rates for each meal type, as
adjusted in accordance with paragraph (d)(9) of this section. Sponsors
must be eligible to receive additional administrative reimbursement for
each meal served to participating children at rural or self-preparation
sites, and the rates for such additional administrative reimbursement
must be adjusted in accordance with paragraph (d)(9) of this section.
(9) On each January 1, or as soon thereafter or as practicable, FNS
will publish a notice in the Federal Register announcing any adjustment
to the reimbursement rates described in paragraphs (d)(7)(ii) and
(d)(8)(iii) of this section. Adjustments will be based upon changes in
the series for food away from home of the Consumer Price Index(CPI) for
all urban consumers since the establishment of the rates. Higher rates
will be established for Alaska and Hawaii, based on the CPI for those
States.
(10) Sponsors of camps shall be reimbursed only for meals served to
children in camps whose eligibility for Program meals is documented.
Sponsors of NYSP sites shall only claim reimbursement for meals served
to children enrolled in the NYSP.
(11) If a State agency has reason to believe that a sponsor or food
service management company has engaged in unlawful acts in connection
with Program operations, evidence found in audits, reviews, or
investigations shall be a basis for nonpayment of the applicable
sponsor's claims for reimbursement.
(e) The sponsor may claim reimbursement for any meals which are
examined for meal quality by the State agency, auditors, or local health
authorities and found to meet the meal pattern requirements.
(f) The sponsor shall not claim reimbursement for meals served to
children at any site in excess of the site's approved level of meal
service, if one has been established under Sec. 225.6(d)(2). However,
the total number of meals for which operating costs are claimed may
exceed the approved level of meal service if the meals exceeding this
level were served to adults performing necessary food service labor in
accordance with paragraph (d)(5) of this section. In reviewing a
sponsor's claim, the State agency shall ensure that reimbursements for
second meals are limited to the percentage tolerance established in
Sec. 225.15(b)(4).
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13469, Apr. 10, 1990;
64 FR 72485, Dec. 28, 1999]
[[Page 139]]
Sec. 225.10 Audits and management evaluations.
(a) Audits. State agencies shall arrange for audits of their own
operations to be conducted in accordance with the Department's Uniform
Federal Assistance Regulations (7 CFR part 3015). Unless otherwise
exempt, sponsors shall arrange for audits to be conducted in accordance
with 7 CFR part 3015. State agencies shall provide OIG with full
opportunity to audit the State agency and sponsors. Each State agency
shall make available its records, including records of the receipt and
expenditure of funds, upon a reasonable request from OIG. While OIG
shall rely to the fullest extent feasible upon State-sponsored audits of
sponsors, it shall, when considered necessary, (1) make audits on a
State-wide basis, (2) perform on-site test audits, and (3) review audit
reports and related working papers of audits performed by or for State
agencies.
(b) Management evaluations. (1) State agencies shall provide FNS
with full opportunity to conduct management evaluations (including
visits to sponsors) of all operations of the State agency. Each State
agency shall make available its records, including records of the
receipts and expenditures of funds, upon a reasonable request by FNS.
(2) The State agency shall fully respond to any recommendations made
by FNSRO pursuant to the management evaluation.
(3) FNSRO may require the State agency to submit on 20 days notice a
corrective action plan regarding serious problems observed during any
phase of the management evaluation.
(c) Disregards. In conducting management evaluations or audits for
any fiscal year, the State agency, FNS or OIG may disregard overpayment
which does not exceed $100 or, in the case of State agency administered
programs, does not exceed the amount established by State law,
regulations or procedures as a minimum for which claims will be made for
State losses generally. No overpayment shall be disregarded, however,
when there are unpaid claims for the same fiscal year from which the
overpayment can be deducted or when there is substantial evidence of
violation of criminal law or civil fraud statutes.
Sec. 225.11 Corrective action procedures.
(a) Purpose. The provisions in this section shall be used by the
State agency to improve Program performance.
(b) Investigations. Each State agency shall promptly investigate
complaints received or irregularities noted in connection with the
operation of the Program, and shall take appropriate action to correct
any irregularities. The State agency shall maintain on file all evidence
relating to such investigations and actions. The State agency shall
inform the appropriate FNSRO of any suspected fraud or criminal abuse in
the Program which would result in a loss or misuse of Federal funds. The
Department may make investigations at the request of the State agency,
or where the Department determines investigations are appropriate.
(c) Denial of applications and termination of sponsors. Except as
specified below, the State agency shall not enter into an agreement with
any applicant sponsor identifiable through its corporate organization,
officers, employees, or otherwise, as an institution which participated
in any Federal child nutrition program and was seriously deficient in
its operation of any such program. The State agency shall terminate the
Program agreement with any sponsor which it determines to be seriously
deficient. However, the State agency shall afford a sponsor reasonable
opportunity to correct problems before terminating the sponsor for being
seriously deficient. The State agency may approve the application of a
sponsor which has been disapproved or terminated in prior years in
accordance with this paragraph if the sponsor demonstrates to the
satisfaction of the State agency that the sponsor has taken appropriate
corrective actions to prevent recurrence of the deficiencies. Serious
deficiencies which are grounds for disapproval of applications and for
termination include, but are not limited to, any of the following:
(1) Noncompliance with the applicable bid procedures and contract
requirements of Federal child nutrition program regulations;
[[Page 140]]
(2) The submission of false information to the State agency;
(3) Failure to return to the State agency any start-up or advance
payments which exceeded the amount earned for serving meals in
accordance with this part, or failure to submit all claims for
reimbursement in any prior year, provided that failure to return any
advance payments for months for which claims for reimbursement are under
dispute from any prior year shall not be grounds for disapproval in
accordance with this paragraph; and
(4) Program violations at a significant proportion of the sponsor's
sites. Such violations include, but are not limited to, the following:
(i) Noncompliance with the meal service time restrictions set forth
at Sec. 225.16(c);
(ii) Failure to maintain adequate records;
(iii) Failure to adjust meal orders to conform to variations in the
number of participating children;
(iv) The simultaneous service of more than one meal to any child;
(v) The claiming of Program payments for meals not served to
participating children;
(vi) Service of a significant number of meals which did not include
required quantities of all meal components;
(vii) Excessive instances of off-site meal consumption;
(viii) Continued use of food service management companies that are
in violation of health codes.
(d) Meal service restriction. With the exception for residential
camps set forth at Sec. 225.16(b)(1)(ii), the State agency shall
restrict to one meal service per day:
(1) Any food service site which is determined to be in violation of
the time restrictions for meal service set forth at Sec. 225.16(c) when
corrective action is not taken within a reasonable time as determined by
the State agency; and
(2) All sites under a sponsor if more than 20 percent of the
sponsor's sites are determined to be in violation of the time
restrictions set forth at Sec. 225.16(c).
If this action results in children not receiving meals under the
Program, the State agency shall make reasonable effort to locate another
source of meal service for these children.
(e) Meal disallowances. (1) If the State agency determines that a
sponsor has failed to plan, prepare, or order meals with the objective
of providing only one meal per child at each meal service at a site, the
State agency shall disallow the number of children's meals prepared or
ordered in excess of the number of children served.
(2) If the State agency observes meal service violations during the
conduct of a site review, the State agency shall disallow as meals
served to children all of the meals observed to be in violation.
(3) The State agency shall also disallow children's meals which are
in excess of a site's approved level established under Sec.
225.6(d)(2).
(f) Corrective action and termination of sites. (1) Whenever the
State agency observes violations during the course of a site review, it
shall require the sponsor to take corrective action. If the State agency
finds a high level of meal service violations, the State agency shall
require a specific immediate corrective action plan to be followed by
the sponsor and shall either conduct a follow-up visit or in some other
manner verify that the specified corrective action has been taken.
(2) The State agency shall terminate the participation of a
sponsor's site if the sponsor fails to take action to correct the
Program violations noted in a State agency review report within the
timeframes established by the corrective action plan.
(3) The State agency shall immediately terminate the participation
of a sponsor's site if during a review it determines that the health or
safety of the participating children is imminently threatened.
(4) If the site is vended, the State agency shall within 48 hours
notify the food service management company providing meals to the site
of the site's termination.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13469, Apr. 10, 1990]
Sec. 225.12 Claims against sponsors.
(a) The State agency shall disallow any portion of a claim for
reimbursement and recover any payment to a sponsor not properly payable
under this part, except as provided for in
[[Page 141]]
Sec. 225.10(c). State agencies may consider claims for reimbursement
not properly payable if a sponsor's records do not justify all costs and
meals claimed. However, the State agency shall notify the sponsor of the
reasons for any disallowance or demand for repayment.
(b) Minimum State agency collection procedures for unearned payments
shall include:
(1) Written demand to the sponsor for the return of improper
payments;
(2) If after 30 calendar days the sponsor fails to remit full
payment or agree to a satisfactory repayment schedule, a second written
demand for the return of improper payments, sent by certified mail,
return receipt requested;
(3) If after 60 calendar days following the original written demand,
the sponsor fails to remit full payment or agree to a satisfactory
repayment schedule, a third written demand for the return of improper
payments, sent by certified mail, return receipt requested;
(4) If after 90 calendar days following the original written demand,
the sponsor fails to remit full payment or agree to a satisfactory
repayment schedule, the State agency shall refer the claim against the
sponsor to the appropriate State or Federal authorities for pursuit of
legal remedies.
(c) If FNS does not concur with the State agency's action in paying
a sponsor or in failing to collect an overpayment, FNS shall notify the
State agency of its intention to assert a claim against the State
agency. In all such cases, the State agency shall have full opportunity
to submit evidence concerning the action taken. The State agency shall
be liable to FNS for failure to collect an overpayment unless FNS
determines that the State agency has conformed with this part in issuing
the payment and has exerted reasonable efforts in accordance with
paragraph (b) of this section to recover the improper payment.
(d) The amounts recovered by the State agency from sponsors may be
utilized to make Program payments to sponsors for the period for which
the funds were initially available and/or to repay the State for any of
its own funds used to make payments on claims for reimbursement. Any
amounts recovered which are not so utilized shall be returned to FNS in
accordance with the requirements of this part.
Sec. 225.13 Appeal procedures.
(a) Each State agency shall establish a procedure to be followed by
an applicant appealing: A denial of an application for participation; a
denial of a sponsor's request for an advance payment; a denial of a
sponsor's claim for reimbursement (except for late submission under
Sec. 225.9(d)(5)); a State agency's refusal to forward to FNS an
exception request by the sponsor for payment of a late claim or a
request for an upward adjustment to a claim; a claim against a sponsor
for remittance of a payment; the termination of the sponsor or a site; a
denial of a sponsor's application for a site; a denial of a food service
management company's application for registration, if applicable; or the
revocation of a food service management company's registration, if
applicable. Appeals shall not be allowed on decisions made by FNS with
respect to late claims or upward adjustments under Sec. 225.9(d)(5).
(b) At a minimum, appeal procedures shall provide that:
(1) The sponsor or food service management company be advised in
writing of the grounds upon which the State agency based the action. The
notice of action, which shall be sent by certified mail, return receipt
requested, shall also state that the sponsor or food service management
company has the right to appeal the State's action;
(2) The sponsor or food service management company be advised in
writing that the appeal must be made within a specified time and must
meet the requirements of paragraph (b)(4) of this section. The State
agency shall establish this period of time at not less than one week nor
more than two weeks from the date on which the notice of action is
received;
(3) The appellant be allowed the opportunity to review any
information upon which the action was based;
(4) The appellant be allowed to refute the charges contained in the
notice of action either in person or by filing written documentation
with the review official. To be considered, written documentation must
be submitted by the
[[Page 142]]
appellant within seven days of submitting the appeal, must clearly
identify the State agency action being appealed, and must include a
photocopy of the notice of action issued by the State agency;
(5) A hearing be held by the review official in addition to, or in
lieu of, a review of written information submitted by the appellant only
if the appellant so specifies in the letter appealing the action. The
appellant may retain legal counsel or may be represented by another
person. Failure of the appellant's representative to appear at a
scheduled hearing shall constitute the appellant's waiver of the right
to a personal appearance before the review official, unless the review
official agrees to reschedule the hearing. A representative of the State
agency shall be allowed to attend the hearing to respond to the
appellant's testimony and written information and to answer questions
from the review official;
(6) If the appellant has requested a hearing, the appellant and the
State agency shall be provided with at least 5 days advance written
notice, sent by certified mail, return receipt requested, of the time
and place of the hearing;
(7) The hearing be held within 14 days of the date of the receipt of
the request for review, but, where applicable, not before the
appellant's written documentation is received in accordance with
paragraphs (b) (4) and (5) of this section;
(8) The review official be independent of the original decision-
making process;
(9) The review official make a determination based on information
provided by the State agency and the appellant, and on Program
regulations;
(10) Within 5 working days after the appellant's hearing, or within
5 working days after receipt of written documentation if no hearing is
held, the reviewing official make a determination based on a full review
of the administrative record and inform the appellant of the
determination of the review by certified mail, return receipt requested;
(11) The State agency's action remain in effect during the appeal
process. However, participating sponsors and sites may continue to
operate the Program during an appeal of termination, and if the appeal
results in overturning the State agency's decision, reimbursement shall
be paid for meals served during the appeal process. However, such
continued Program operation shall not be allowed if the State agency's
action is based on imminent dangers to the health or welfare of
children. If the sponsor or site has been terminated for this reason,
the State agency shall so specify in its notice of action; and
(12) The determination by the State review official is the final
administrative determination to be afforded to the appellant.
(c) The State agency shall send written notification of the complete
appeal procedures and of the actions which are appealable, as specified
in paragraph (a) of this section, to each potential sponsor applying to
participate and to each food service management company applying to
register in accordance with Sec. 225.6(g).
(d) A record regarding each review shall be kept by the State
agency, as required under Sec. 225.8(a). The record shall document the
State agency's compliance with these regulations and shall include the
basis for its decision.
[54 FR 18208, Apr. 27, 1989, as amended at 64 FR 72486, Dec. 28, 1999]
Subpart C_Sponsor and Site Provisions
Sec. 225.14 Requirements for sponsor participation.
(a) Applications. Sponsors shall make written application to the
State agency to participate in the Program. Such application shall be
made on a timely basis in accordance with the requirements of Sec.
225.6(b)(1). Sponsors proposing to operate a site during an
unanticipated school closure during the period from October through
April (or at any time of the year in an area with a continuous school
calendar) may be exempt, at the discretion of the State agency, from
submitting a new application if they have participated in the program at
any time during the current year or in either of the prior two calendar
years.
[[Page 143]]
(b) Sponsor eligibility. Applicants eligible to sponsor the Program
include:
(1) Public or nonprofit private school food authorities;
(2) Public or nonprofit private residential summer camps;
(3) Units of local, municipal, county, or State governments;
(4) Public or private nonprofit colleges or universities which are
currently participating in the National Youth Sports Program; and
(5) Private nonprofit organizations as defined in Sec. 225.2.
(c) General requirements. No applicant sponsor shall be eligible to
participate in the Program unless it:
(1) Demonstrates financial and administrative capability for Program
operations and accepts final financial and administrative responsibility
for total Program operations at all sites at which it proposes to
conduct a food service;
(2) Has not been seriously deficient in operating the Program;
(3) Will conduct a regularly scheduled food service for children
from areas in which poor economic conditions exist, or qualifies as a
camp;
(4) Has adequate supervisory and operational personnel for overall
monitoring and management of each site, including adequate personnel to
conduct the visits and reviews required in Sec. Sec. 225.15(d) (2) and
(3);
(5) Provides an ongoing year-round service to the community which it
proposes to serve under the Program, except as provided for in Sec.
225.6(b)(4);
(6) Certifies that all sites have been visited and have the
capability and the facilities to provide the meal service planned for
the number of children anticipated to be served; and
(7) Enters into a written agreement with the State agency upon
approval of its application, as required in Sec. 225.6(e).
(d) Requirements specific to sponsor types. (1) If the sponsor is a
camp, it must certify that it will collect information on participants'
eligibility to support its claim for reimbursement.
(2) If the sponsor administers the Program at sites that provide
summer school sessions, it must ensure that these sites are open to
children enrolled in summer school and to all children residing in the
area served by the site.
(3) Sponsors which are units of local, municipal, county or State
government, and sponsors which are private nonprofit organizations, will
only be approved to administer the Program at sites where they have
direct operational control. Operational control means that the sponsor
shall be responsible for:
(i) Managing site staff, including the hiring, terminating, and
determining conditions of employment for site staff; and
(ii) Exercising management control over Program operations at sites
throughout the period of Program participation by performing the
functions specified in Sec. 225.15.
(4) If the sponsor administers homeless feeding sites, it must:
(i) Document that the site is not a residential child-care
institution as defined in paragraph (c) of the definition of 'School'
contained in Sec. 210.2 of this chapter;
(ii) Document that the primary purpose of the homeless feeding site
is to provide shelter and meals to homeless families; and
(iii) Certify that these sites employ meal counting methods to
ensure that reimbursement is claimed only for meals served to homeless
and non-homeless children.
(5) If the sponsor administers NYSP sites, it must ensure that all
children at these sites are enrolled participants in the NYSP.
(6) If the sponsor is a private nonprofit organization, it must
certify that it:
(i) Administers the Program:
(A) At no more than 25 sites, with not more than 300 children being
served at any approved meal service at any one site, or
(B) With a waiver granted by the State agency in accordance with
Sec. 225.6(b)(6)(ii), not more than 500 children being served at any
approved meal service at any one site;
(ii) Operates in areas where a school food authority has not
indicated that it will operate the Program in the current year;
[[Page 144]]
(iii) Exercises full control and authority over the operation of the
Program at all sites under its sponsorship;
(iv) Provides ongoing year-round activities for children or
families;
(v) Demonstrates that it possesses adequate management and the
fiscal capacity to operate the Program; and
(vi) Meets applicable State and local health, safety, and sanitation
standards.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13469, Apr. 10, 1990;
64 FR 72486, Dec. 28, 1999; 64 FR 72898, Dec. 29, 1999; 65 FR 50128,
Aug. 17, 2000]
Sec. 225.15 Management responsibilities of sponsors.
(a) General. (1) Sponsors shall operate the food service in
accordance with: the provisions of this part; any instructions and
handbooks issued by FNS under this part; and any instructions and
handbooks issued by the State agency which are not inconsistent with the
provisions of this part.
(2) Sponsors shall not claim reimbursement under parts 210, 215,
220, or 226 of this chapter. In addition, the sponsor must ensure that
records of any site serving homeless children accurately reflect
commodity allotments received as a ``charitable institution'', as
defined in Sec. Sec. 250.3 and 250.41 of this chapter. Commodities
received for Program meals must be based only on the number of eligible
children's meals served. Sponsors may use funds from other Federally-
funded programs to supplement their meal service but must, in
calculating their claim for reimbursement, deduct such funds from total
operating and administrative costs in accordance with the definition of
``income accruing to the Program'' at Sec. 225.2 and with the
regulations at Sec. 225.9(d). Sponsors which are school food
authorities may use facilities, equipment and personnel supported by
funds provided under this part to support a nonprofit nutrition program
for the elderly, including a program funded under the Older Americans
Act of 1965 (42 U.S.C. 3001 et seq.).
(3) No sponsor may contract out for the management responsibilities
of the Program described in this section.
(b) Meal Ordering. (1) Each sponsor shall, to the maximum extent
feasible, utilize either its own food service facilities or obtain meals
from a school food service facility. If the sponsor obtains meals from a
school food service facility, the applicable requirements of this part
shall be embodied in a written agreement between the sponsor and the
school.
(2) Upon approval of its application or any adjustment in the
approved levels of meal service for its sites established under Sec.
225.6(d)(2), vended sponsors shall inform their food service management
company of the approved level at each site for which the food service
management company will provide meals.
(3) Sponsors shall plan for and prepare or order meals on the basis
of participation trends with the objective of providing only one meal
per child at each meal service. The sponsor shall make the adjustments
necessary to achieve this objective using the results from its
monitoring of sites. For sites for which approved levels of meal service
have been established in accordance with Sec. 225.6(d)(2), the sponsor
shall adjust the number of meals ordered or prepared with the objective
of providing only one meal per child whenever the number of children
attending the site is below the approved level. The sponsor shall not
order or prepare meals for children at any site in excess of the site's
approved level, but may order or prepare meals above the approved level
if the meals are to be served to adults performing necessary food
service labor in accordance with Sec. 225.9(d)(4). Records of
participation and of preparation or ordering of meals shall be
maintained to demonstrate positive action toward meeting this objective.
(4) In recognition of the fluctuation in participation levels which
makes it difficult to estimate precisely the number of meals needed and
to reduce the resultant waste, sponsors may claim reimbursement for a
number of second meals which does not exceed two percent of the number
of first meals served to children for each meal type (i.e., breakfasts,
lunches, supplements, or suppers) during the claiming period. The State
agency shall disallow all claims for second meals if it determines that
the sponsor failed to plan
[[Page 145]]
and prepare or order meals with the objective of providing only one meal
per child at each meal service. Second meals shall be served only after
all participating children at the site's meal service have been served a
meal.
(c) Records and claims. (1) Sponsors shall maintain accurate records
which justify all costs and meals claimed. Failure to maintain such
records may be grounds for denial of reimbursement for meals served and/
or administrative costs claimed during the period covered by the records
in question. The sponsor's records shall be available at all times for
inspection and audit by representatives of the Secretary, the
Comptroller General of the United States, and the State agency for a
period of three years following the date of submission of the final
claim for reimbursement for the fiscal year.
(2) Sponsors shall submit claims for reimbursement in accordance
with this part. All final claims must be submitted to the State agency
within 60 days following the last day of the month covered by the claim.
(d) Training and monitoring. (1) Each sponsor shall hold Program
training sessions for its administrative and site personnel and shall
allow no site to operate until personnel have attended at least one of
these training sessions. The State agency may waive these training
requirements for operation of the Program during unanticipated school
closures during the period from October through April (or at any time of
the year in an area with a continuous school calendar). Training of site
personnel shall, at a minimum, include: the purpose of the Program; site
eligibility; recordkeeping; site operations; meal pattern requirements;
and the duties of a monitor. Each sponsor shall ensure that its
administrative personnel attend State agency training provided to
sponsors, and sponsors shall provide training throughout the summer to
ensure that administrative personnel are thoroughly knowledgeable in all
required areas of Program administration and operation and are provided
with sufficient information to enable them to carry out their Program
responsibilities. Each site shall have present at each meal service at
least one person who has received this training.
(2) Sponsors shall visit each of their sites at least once during
the first week of operation under the Program and shall promptly take
such actions as are necessary to correct any deficiencies.
(3) Sponsors shall review food service operations at each site at
least once during the first four weeks of Program operations, and
thereafter shall maintain a reasonable level of site monitoring.
Sponsors shall complete a monitoring form developed by the State agency
during the conduct of these reviews.
(e) Media Release. Each sponsor shall annually announce in the media
serving the area from which it draws its attendance the availability of
free meals. Camps and other programs not eligible under Sec. 225.2
(paragraph (a) of ``areas in which poor economic conditions exist'')
shall annually announce to all participants the availability of free
meals for eligible children. All media releases issued by camps and
other programs not eligible under Sec. 225.2 (paragraph (a) of ``areas
in which poor economic conditions exist'') shall include: the
Secretary's family-size and income standards for reduced price school
meals labelled ``SFSP Income Eligibility Standards''; a statement that
children who are members of households receiving food stamp, FDPIR, or
TANF benefits are automatically eligible to receive free meal benefits
at eligible program sites; and a statement that meals are available
without regard to race, color, national origin, sex, age, or handicap.
(f) Application for free Program meals.--(1) Purpose of application
form. The application is used to determine the eligibility of children
attending camps and the eligibility of sites that are not open sites as
defined in paragraph (a) of the definition of ``areas in which poor
economic conditions exist'', in Sec. 225.2. In these situations,
parents or guardians of children enrolled in camps or these other sites
must be given application forms to provide information described in
paragraph (f)(2) or (f)(3) of this section, as applicable. Applications
are not necessary if other information sources are available and can
[[Page 146]]
be used to determine eligibility of individual children in camps or
sites.
(2) Application procedures based on household income. The household
member completing the application on behalf of the child enrolled in the
Program must provide the following information:
(i) The names of all children for whom application is made;
(ii) The names of all other household members;
(iii) The social security number of the adult household member who
signs the application or an indication that the household member does
not have a social security number;
(iv) The income received by each household member identified by
source of income;
(v) The signature of an adult household member;
(vi) The date the application is completed and signed.
(3) Application based on the household's receipt of food stamp,
FDPIR, or TANF benefits. Households may apply on the basis of receipt of
food stamp, FDPIR, or TANF benefits by providing the following
information:
(i) The name(s) and food stamp, FDPIR, or TANF case number(s) of the
child(ren) who are enrolled in the Program; and
(ii) The signature of an adult household member.
(4) Information or notices required on application forms.
Application forms or descriptive materials given to households about
applying for free meals must contain the following information:
(i) The family-size and income levels for reduced price school meal
eligibility with an explanation that households with incomes less than
or equal to these values are eligible for free Program meals (Note: The
income levels for free school meal eligibility must not be included on
the application or in other materials given to the household).
(ii) A statement that a child who is a member of a household that
receives food stamp, FDPIR, or TANF benefits is automatically eligible
to receive free meals in the Program;
(iii) A statement that reads, ``In certain cases, foster children
are eligible for free meals regardless of household income. If such
children are living with you and you wish to apply for such meals,
please contact us.'';
(iv) The following statement that provides notice to the household
member whose social security number is disclosed: ``Unless you include
your child's case number for the Food Stamp Program, the Food
Distribution Program on Indian Reservations (or other identifier for the
Food Distribution Program on Indian Reservations) or the Temporary
Assistance for Needy Families Program, you must include the social
security number of the adult household member signing the application or
indicate that the household member does not have a social security
number. This is required by section 9 of the National School Lunch Act.
The social security number is not mandatory, but the application cannot
be approved if a social security number is not given or an indication is
not made that the signer does not have a social security number. The
social security number will be used in the administration and
enforcement of the program.''
(v) The statement used to inform the household about the use of
social security numbers must comply with the Privacy Act of 1974 (Pub.
L. 93-579). If a State or local agency plans to use the social security
numbers for uses not described in paragraph (f)(4)(iv) of this section,
the notice must be revised to explain those uses.
(vi) Examples of income that should be provided on the application,
including: Earnings, wages, welfare benefits, pensions, support
payments, unemployment compensation, social security, and other cash
income;
(vii) A notice placed immediately above the signature block stating
that the person signing the application certifies that all information
provided is correct, that the household is applying for Federal benefits
in the form of free Program meals, that Program officials may verify the
information on the application, and that purposely providing untrue or
misleading statements may result in prosecution under State or Federal
criminal laws; and
(viii) A statement that if food stamp, FDPIR, or TANF case numbers
are provided, they may be used to verify the
[[Page 147]]
current food stamp, FDPIR, or TANF certification for the children for
whom free meals benefits are claimed.
(5) Verifying information on Program applications. Households
selected to verify information on their Program applications must be
notified in writing. State agencies must ensure that the notice of
information about the use of social security numbers provided on
applications complies with section 7 of Pub. L. 93-579 (Privacy Act of
1974). Households must be informed of the following:
(i) They must provide a social security number for each adult
household member, or indicate that an adult household member does not
have a social security number, or provide proof that they are receiving
food stamp, FDPIR, or TANF benefits;
(ii) They will lose Program benefits or be terminated from
participation if they do not cooperate with the verification process;
(iii) Social security numbers may be used to determine the
correctness of information on applications and continued eligibility for
Program benefits;
(iv) They will be given the name and phone number of an official who
can assist in the verification process;
(v) Verification may occur during program reviews, audits, and
investigations;
(vi) Verification may include contacting employers, food stamp or
welfare offices, or State employment offices to determine the accuracy
of statements on the application about income, receipt of food stamp,
FDPIR, TANF, or unemployment benefits; and
(vii) They may lose benefits or face claims or legal action if
incorrect information is reported on the application.
(g) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP).
Program eligibility information about children eligible for free and
reduced price meals may be disclosed to Medicaid and SCHIP as described
in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow sponsors
to disclose children's free and reduced price meal eligibility
information to Medicaid and SCHIP. Sponsors may then elect to do so.
Children's program eligibility information may only be disclosed to
Medicaid or SCHIP when both the State agency and the sponsor so elect,
the parent/guardian does not decline to have their eligibility
information disclosed as described in paragraph (g)(5), and the
requirements in this paragraph (g) are met. y
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or sponsor, as appropriate, may disclose children's
names, eligibility status (whether they are eligible for free or reduced
price meals), and any other eligibility information obtained through the
free and reduced price meal application or obtained through direct
certification to persons directly connected with the administration of
Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration of
Medicaid and SCHIP for purposes of disclosure of children's free and
reduced price meal eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free and reduced price meal eligibility information? Medicaid
and SCHIP agencies and health insurance program operators receiving
children's free and reduced price meal eligibility information may only
use the information to enroll children in Medicaid or SCHIP. The
Medicaid and SCHIP enrollment process may include targeting and
identifying children from low-income households who are potentially
eligible for Medicaid or SCHIP for the purpose of seeking to enroll them
in Medicaid or SCHIP.
(5) What are the requirements for notifying households of potential
disclosure to Medicaid or SCHIP? The State agency or sponsor, as
appropriate, must notify parents/guardians that their children's free or
reduced price meal eligibility
[[Page 148]]
information will be disclosed to Medicaid and/or SCHIP unless the
parent/guardian elects not to have their information disclosed.
Additionally, the State agency or sponsor, as appropriate, must give
parents/guardians an opportunity to elect not to have their information
disclosed to Medicaid or SCHIP. Only the parent or guardian who is a
member of the household or family for purposes of the free and reduced
price meal or free milk application may decline the disclosure of
eligibility information. The notification must inform parents/guardians
that they are not required to consent to the disclosure, that the
information, if disclosed, will be used to identify children eligible
for and seek to enroll children in a health insurance program, and that
their decision will not affect their children's eligibility for free or
reduced price meals. The notification may be included in the letter/
notice to parents/guardians that accompanies the free and reduced price
application, on the application itself or in a separate notice provided
to parents/guardians. The notice must give parents/guardians adequate
time to respond. For children determined eligible through direct
certification, the notice of potential disclosure may be included in the
document informing parents/guardians of their children's eligibility for
free meals through direct certification.
(6) May social security numbers be disclosed? The State agency or
sponsor, as appropriate, may disclose social security numbers to any
programs or persons authorized to receive all program eligibility
information under this paragraph (g), provided parents/guardians have
not declined to have their information disclosed. However, State
agencies and sponsors that plan to disclose social security numbers must
give notice of the planned use of the social security number. This
notice must be in accordance with section 7(b) of the Privacy Act of
1974 (5 U.S.C. 552a note). The application must include substantially
the following language for disclosures of social security numbers to
Medicaid or SCHIP: ``The social security number may also be disclosed to
Medicaid and the State Children's Health Insurance Program for the
purpose of identifying and seeking to enroll eligible children in one of
these health insurance programs.'' This language is in addition to the
notice required in paragraph (f)(4)(iv) of this section. State agencies
and sponsors are responsible for drafting the appropriate notice for
disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or sponsor, as appropriate, must have a
written agreement with the State or local agency or agencies
administering Medicaid or SCHIP prior to disclosing children's free and
reduced price eligibility information. At a minimum, the agreement must:
(i) Identify the health insurance program or health agency receiving
children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or sponsor, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (g) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of children's
free and reduced price meal eligibility information to Medicaid or
SCHIP, as provided in this paragraph (g), must ensure that any sponsor
acting in accordance with that option:
[[Page 149]]
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free and reduced price meal eligibility information to seek to enroll
children in those health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
(h) Food service management companies. (1) Failure by a sponsor to
comply with the provisions of this section shall be sufficient grounds
for the State agency to terminate that sponsor's participation in
accordance with Sec. 225.18.
(2) Any sponsor may contract with a food service management company
to manage the sponsor's food service operations and/or for the
preparation of unitized meals with or without milk or juice. Exceptions
to the unitizing requirement may only be made in accordance with the
provisions set forth at Sec. 225.6(h)(3).
(3) Any vended sponsor shall be responsible for ensuring that its
food service operation is in conformity with its agreement with the
State agency and with all the applicable provisions of this part.
(4) In addition to any applicable State or local laws governing bid
procedures, and with the exceptions identified in this paragraph, each
sponsor which contracts with a food service management company shall
comply with the competitive bid procedures described in this paragraph.
Sponsors which are schools or school food authorities and which have an
exclusive contract with a food service management company for year-round
service, and sponsors whose total contracts with food service management
companies will not exceed $10,000, shall not be required to comply with
these procedures. These exceptions do not relieve the sponsor of the
responsibility to ensure that competitive procurement procedures are
followed in contracting with any food service management company. Each
sponsor whose proposed contract is subject to the specific bid
procedures set forth in this paragraph shall ensure, at a minimum, that:
(i) All proposed contracts are publicly announced at least once, not
less than 14 calendar days prior to the opening of bids, and the
announcement includes the time and place of the bid opening;
(ii) The bids are publicly opened;
(iii) The State agency is notified, at least 14 calendar days prior
to the opening of the bids, of the time and place of the bid opening;
(iv) The invitation to bid does not specify a minimum price;
(v) The invitation to bid contains a cycle menu approved by the
State agency upon which the bid is based;
(vi) The invitation to bid contains food specifications and meal
quality standards approved by the State agency upon which the bid is
based;
(vii) The invitation to bid does not specify special meal
requirements to meet ethnic or religious needs unless such special
requirements are necessary to meet the needs of the children to be
served;
(viii) Neither the invitation to bid nor the contract provides for
loans or any other monetary benefit or term or condition to be made to
sponsors by food service management companies;
(ix) Nonfood items are excluded from the invitation to bid, except
where such items are essential to the conduct of the food service;
(x) Copies of all contracts between sponsors and food service
management companies, along with a certification of independent price
determination, are submitted to the State agency prior to the beginning
of Program operations;
(xi) Copies of all bids received are submitted to the State agency,
along with the sponsor's reason for choosing the successful bidder; and
(xii) All bids in an amount which exceeds the lowest bid and all
bids totaling $100,000 or more are submitted to the State agency for
approval before
[[Page 150]]
acceptance. State agencies shall respond to a request for approval of
such bids within 5 working days of receipt.
(5) Each food service management company which submits a bid over
$100,000 shall obtain a bid bond in an amount not less than five (5)
percent nor more than ten (10) percent, as determined by the sponsor, of
the value of the contract for which the bid is made. A copy of the bid
bond shall accompany each bid.
(6) Each food service management company which enters into a food
service contract for over $100,000 with a sponsor shall obtain a
performance bond in an amount not less than ten (10) percent nor more
than twenty-five (25) percent of the value of the contract, as
determined by the State agency, of the value of the contract for which
the bid is made. Any food service management company which enters into
more than one contract with any one sponsor shall obtain a performance
bond covering all contracts if the aggregate amount of the contracts
exceeds $100,000. Sponsors shall require the food service management
company to furnish a copy of the performance bond within ten days of the
awarding of the contract.
(7) Food service management companies shall obtain bid bonds and
performance bonds only from surety companies listed in the current
Department of the Treasury Circular 570. No sponsor or State agency
shall allow food service management companies to post any
``alternative'' forms of bid or performance bonds, including but not
limited to cash, certified checks, letters of credit, or escrow
accounts.
(i) Other responsibilities. Sponsors shall comply with all of the
meal service requirements set forth in Sec. 225.16.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13470, Apr. 10, 1990;
61 FR 25553, May 22, 1996; 64 FR 72486, Dec. 28, 1999; 64 FR 72898, Dec.
29, 1999; 65 FR 82251, Dec. 28, 2000; 66 FR 2202, Jan. 11, 2001]
Sec. 225.16 Meal service requirements.
(a) Sanitation. Sponsors shall ensure that in storing, preparing,
and serving food, proper sanitation and health standards are met which
conform with all applicable State and local laws and regulations.
Sponsors shall ensure that adequate facilities are available to store
food or hold meals. Within two weeks of receiving notification of their
approval, but in any case prior to commencement of Program operation,
sponsors shall submit to the State agency a copy of their letter
advising the appropriate health department of their intention to provide
a food service during a specific period at specific sites.
(b) Meal services. The meals which may be served under the Program
are breakfast, lunch, supper, and supplements, referred to from this
point as ``snacks''. No sponsor may be approved to provide more than two
snacks per day. A sponsor may only be reimbursed for meals served in
accordance with this section.
(1) Camps. Sponsors of camps shall only be reimbursed for meals
served in camps to children from families which meet the eligibility
standards for this Program. The sponsor shall maintain a copy of the
documentation establishing the eligibility of each child receiving meals
under the Program. Meal service at camps shall be subject to the
following provisions:
(i) Each day a camp may serve up to three meals or two meals and one
snack;
(ii) Residential camps are not subject to the time restrictions for
meal service set forth at paragraphs (c) (1) and (2) of this section;
and
(iii) A camp shall be approved to serve these meals only if it has
the administrative capability to do so; if the service period of the
different meals does not coincide or overlap; and, where applicable, if
it has adequate food preparation and holding facilities.
(2) NYSP Sites. Sponsors of NYSP sites shall only be reimbursed for
meals served to enrolled NYSP participants at these sites.
(3) Restrictions on the number and type of meals served. Food
service sites other than camps and sites that primarily serve migrant
children may serve either:
(i) One meal each day, a breakfast, a lunch, or snack; or
(ii) Two meals each day, if one is a lunch and the other is a
breakfast or a snack.
[[Page 151]]
(4) Sites which serve children of migrant families. Food service
sites that primarily serve children from migrant families may be
approved to serve each day up to three meals or two meals and one snack.
These sites shall serve children in areas where poor economic conditions
exist as defined in Sec. 225.2. A sponsor which operates in accordance
with this part shall receive reimbursement for all meals served to
children at these sites. A site which primarily serves children from
migrant families shall only be approved to serve more than one meal each
day if it has the administrative capability to do so; if the service
period of the different meals does not coincide or overlap; and, where
applicable, if it has adequate food preparation and holding facilities.
(c) Time restrictions for meal service. (1) Three hours must elapse
between the beginning of one meal service, including snacks, and the
beginning of another, except that 4 hours must elapse between the
service of a lunch and supper when no snack is served between lunch and
supper. The service of supper shall begin no later than 7 p.m., unless
the State agency has granted a waiver of this requirement due to
extenuating circumstances. These waivers shall be granted only when the
State agency and the sponsor ensure that special arrangements shall be
made to monitor these sites. In no case may the service of supper extend
beyond 8 p.m. The time restrictions in this paragraph shall not apply to
residential camps.
(2) The duration of the meal service shall be limited to two hours
for lunch or supper and one hour for all other meals.
(3) Meals served outside of the period of approved meal service
shall not be eligible for Program payments.
(4) Any permanent or planned changes in meal service periods must be
approved by the State agency.
(5) Meals which are not prepared at the food service site shall be
delivered no earlier than one hour prior to the beginning of the meal
service (unless the site has adequate facilities for holding hot or cold
meals within the temperatures required by State or local health
regulations) and no later than the beginning of the meal service.
(6) The sponsor shall claim for reimbursement only the type(s) of
meals for which it is approved under its agreement with the State
agency.
(d) Meal patterns. The meal requirements for the Program are
designed to provide nutritious and well-balanced meals to each child.
Sponsors shall ensure that meals served meet all of the requirements.
Except as otherwise provided in this section, the following tables
present the minimum requirements for meals served to children in the
Program. Children age 12 and up may be served larger portions based on
the greater food needs of older boys and girls.
(1) Breakfast. The minimum amount of food components to be served as
breakfast are as follows:
------------------------------------------------------------------------
Food components Minimum amount
------------------------------------------------------------------------
Vegetables and Fruits
------------------------------------------------------------------------
Vegetable(s) and/or fruit(s) or..... \1/2\ cup.\1\
Full-strength vegetable or fruit \1/2\ cup (4 fluid ounces).
juice or an equivalent quantity of
any combination of vegetable(s),
fruits(s), and juice.
------------------------------------------------------------------------
Bread and Bread Alternates \2\
------------------------------------------------------------------------
Bread or............................ 1 slice.
Cornbread, biscuits, rolls, muffins, 1 serving.\3\
etc. or.
Cold dry cereal or.................. \3/4\ cup or 1 ounce.\4\
Cooked cereal or cereal grains or... \1/2\ cup.
Cooked pasta or noodle products or \1/2\ cup.
an equivalent quantity of any
combination of bread/bread
alternate.
------------------------------------------------------------------------
Milk \5\
------------------------------------------------------------------------
Milk, fluid......................... 1 cup (\1/2\ pint, 8 fluid
ounces).
------------------------------------------------------------------------
Meat and Meat Alternates (Optional)
------------------------------------------------------------------------
Lean meat or poultry or fish or..... 1 ounce.
[[Page 152]]
Alternate protein product \6\ or.... 1 ounce.
Cheese or........................... 1 ounce.
Egg (large) or...................... \1/2\.
Cooked dry beans or peas or......... \1/4\ cup.
Peanut butter or an equivalent 2 tablespoons.
quantity of any combination of meat/
meat alternate or.
Yogurt, plain or flavored, 4 ounces or \1/2\ cup.
unsweetened or sweetened.
------------------------------------------------------------------------
\1\ For the purposes of the requirement outlined in this table, a cup
means a standard measuring cup.
\2\ Bread, pasta or noodle products, and cereal grains (such as rice,
bulgur, or corn grits) shall be whole-grain or enriched; cornbread,
biscuits, rolls, muffins, etc., shall be made with whole-grain or
enriched meal or flour; cereal shall be whole-grain, enriched or
fortified.
\3\ Serving sizes and equivalents will be in guidance materials to be
distributed by FNS to State agencies.
\4\ Either volume (cup) or weight (ounces), whichever is less.
\5\ Milk shall be served as a beverage or on cereal or used in part for
each purpose.
\6\ Must meet the requirements in appendix A of this part.
(2) Lunch or supper. The minimum amounts of food components to be
served as lunch or supper are as follows:
------------------------------------------------------------------------
Food components Minimum amount
------------------------------------------------------------------------
Meat and Meat Alternates
------------------------------------------------------------------------
Lean meat or poultry or fish or..... 2 ounces.
Alternate protein products \1\ or... 2 ounces.
Cheese or........................... 2 ounces.
Egg (large) or...................... 1.
Cooked dry beans or peas or......... \1/2\ cup.\2\
Peanut butter or soynut butter or 4 tablespoons.
other nut or seed butters or.
Peanuts or soynuts or tree nuts or 1 ounce=50%.\4\
seed \3\ or.
Yogurt, plain or flavored, 8 ounces or 1 cup.
unsweetened or sweetened or an
equivalent quantity of any
combination of the above meat/meat
alternates.
------------------------------------------------------------------------
Vegetables and Fruits
------------------------------------------------------------------------
Vegetable(s) and/or fruit(s) \5\.... \3/4\ cup total.
------------------------------------------------------------------------
Bread and Bread Alternatives \6\
------------------------------------------------------------------------
Bread or............................ 1 slice.
Cornbread, biscuits, rolls, muffins, 1 serving.\7\
etc. or.
Cooked pasta or noodle products or.. \1/2\ cup.
Cooked cereal grains or an \1/2\ cup.
equivalent quantity of any
combination of bread/bread
alternate.
------------------------------------------------------------------------
Milk
------------------------------------------------------------------------
Milk, fluid, served as a beverage... 1 cup (\1/2\ pint, 8 fluid
ounces).
------------------------------------------------------------------------
\1\ Must meet the requirements of appendix A of this part.
\2\ For the purposes of the requirement outlined in this table, a cup
means a standard measuring cup.
\3\ Tree nuts and seeds that may be used as meat alternate are listed in
program guidance.
\4\ No more than 50% of the requirement shall be met with nuts or seeds.
Nuts or seeds shall be combined with another meat/meat alternate to
fulfill the requirement. For purposes of determining combinations, 1
ounce of nuts or seeds is equal to 1 ounce of cooked lean meat,
poultry or fish.
\5\ Serve 2 or more kinds of vegetable(s) and/or fruits or a combination
of both. Full strength vegetable or fruit juice may be counted to meet
not more than one-half of this requirement.
\6\ Bread, pasta or noodle products, and cereal grains (such as rice,
bulgur, or corn grits) shall be whole-grain or enriched; cornbread,
biscuits, rolls, muffins, etc., shall be made with whole-grain or
enriched meal or flour; cereal shall be whole-grain, enriched or
fortified.
\7\ Serving sizes and equivalents will be in guidance materials to be
distributed by FNS to State agencies.
(3) Snacks. The minimum amounts of food components to be served as
snacks are as follows. Select two of the following four components.
(Juice may not be served when milk is served as the only other
component.)
------------------------------------------------------------------------
Food components Minimum amount
------------------------------------------------------------------------
Meat and Meat Alternates
------------------------------------------------------------------------
Lean meat or poultry or fish or..... 1 ounce.
Alternate protein products \1\ or... 1 ounce.
Cheese or........................... 1 ounce.
[[Page 153]]
Egg (large) or...................... \1/2\.
Cooked dry beans or peas or......... \1/4\ cup \2\.
Peanut butter or soynut butter or 2 tablespoons.
other nut or seed butters or.
Peanuts or soynuts or tree nuts or 1 ounce.
seeds \3\ or.
Yogurt, plain or flavored, 4 ounce or \1/2\ cup.
unsweetened or sweetened or an
equivalent quantity of any
combination of the above meat/meat
alternates.
------------------------------------------------------------------------
Vegetables and Fruits
------------------------------------------------------------------------
Vegetable(s) and/or fruit(s) or..... \3/4\ cup.
Full-strength vegetable or fruit \3/4\ cup (6 fluid ounces).
juice or an equivalent quantity or
any combination of vegetable(s),
fruits(s) and juice.
------------------------------------------------------------------------
Bread and Bread Alternates \4\
------------------------------------------------------------------------
Bread or............................ 1 slice.
Cornbread, biscuits, rolls, muffins, 1 serving.\5\
etc. or.
Cold dry cereal or.................. \3/4\ cup or 1 ounce.\6\
Cooked cereal or.................... \1/2\ cup.
Cooked cereal grains or an \1/2\ cup.
equivalent quantity of any
combination of bread/bread
alternate.
------------------------------------------------------------------------
Milk \7\
------------------------------------------------------------------------
Milk, fluid......................... 1 cup (\1/2\ pint, 8 fluid
ounces).
------------------------------------------------------------------------
\1\ Must meet the requirements in appendix A of this part.
\2\ For the purposes of the requirement outlined in this table, a cup
means a standard measuring cup.
\3\ Tree nuts and seeds that may be used as meat alternates are listed
in program guidance.
\4\ Bread, pasta or noodle products, and cereal grains (such as rice,
bulgur, or corn grits) shall be whole-grain or enriched; cornbread,
biscuits, rolls, muffins, etc., shall be made with whole-grain or
enriched meal or flour; cereal shall be whole-grain, enriched or
fortified.
\5\ Serving sizes and equivalents will be in guidance materials to be
distributed by FNS to State agencies.
\6\ Either volume (cup) or weight (ounces), whichever is less.
\7\ Milk should be served as a beverage or on cereal, or used in part
for each purpose.
(e) Meat or meat alternate. Meat or meat alternates served under the
Program are subject to the following requirements and recommendations.
(1) The required quantity of meat or meat alternate shall be the
quantity of the edible portion as served. These foods must be served in
a main dish, or in a main dish and one other menu item.
(2) Cooked dry beans or peas may be used as a meat alternate or as a
vegetable, but they may not be used to meet both component requirements
in a meal.
(3) Enriched macaroni with fortified protein may be used to meet
part but not all of the meat/meat alternate requirement. The Department
will provide guidance to State agencies on the part of the meat/meat
alternate requirement which these foods may be used to meet. If enriched
macaroni with fortified protein is served as a meat alternate it shall
not be counted toward the bread requirement.
(4) If the sponsor believes that the recommended portion size of any
meat or meat alternate is too large to be appealing to children, the
sponsor may reduce the portion size of that meat or meat alternate and
supplement it with another meat or meat alternate to meet the full
requirement.
(5) Nuts and seeds and their butters listed in program guidance are
nutritionally comparable to meat or other meat alternates based on
available nutritional data. Acorns, chestnuts, and coconuts shall not be
used as meat alternates due to their low protein content. Nut and seed
meals or flours shall not be used as a meat alternate except as defined
in this section under paragraph (e)(3) and in this part under Appendix
A: Alternate Foods for Meals. As noted in paragraph (d)(2) of this
section, nuts or seeds may be used to meet no more than one-half of the
meat/meat alternate requirement for lunch or supper. Therefore, nuts or
seeds must be combined with another meat/meat alternate to fulfill the
requirement. For the supplemental food pattern, nuts or seeds may be
used to fulfill all of the meat/meat alternate requirement.
(f) Exceptions to and variations from the meal pattern--(1) Meals
provided by school food authorities--(i) Meal pattern
[[Page 154]]
substitution. School food authorities that are Program sponsors and that
participate in the National School Lunch or School Breakfast Program
during any time of the year may substitute the meal pattern requirements
of the regulations governing those programs (Parts 210 and 220 of this
chapter, respectively) for the meal pattern requirements in this
section.
(ii) Offer versus serve. School food authorities that are Program
sponsors may permit a child to refuse one or more items that the child
does not intend to eat. The school food authority must apply this
``offer versus serve'' option under the rules followed for the National
School Lunch Program, as described in part 210 of this chapter. The
reimbursements to school food authorities for Program meals served under
the ``offer versus serve'' must not be reduced because children choose
not to take all components of the meals that are offered.
(2) Children under 6. The State agency may authorize the sponsor to
serve food in smaller quantities than are indicated in paragraph (d) of
this section to children under six years of age if the sponsor has the
capability to ensure that variations in portion size are in accordance
with the age levels of the children served. Sponsors wishing to serve
children under one year of age shall first receive approval to do so
from the State agency. In both cases, the sponsor shall follow the age-
appropriate meal pattern requirements contained in the Child and Adult
Care Food Program regulations (7 CFR part 226).
(3) Statewide substitutions. In American Samoa, Puerto Rico, Guam,
the Virgin Islands, the Trust Territory of the Pacific Islands, and the
Northern Mariana Islands, the following variations from the meal
requirements are authorized: A serving of a starchy vegetable--such as
ufi, tanniers, yams, plantains, or sweet potatoes--may be substituted
for the bread requirements.
(4) Individual substitutions. Substitutions may be made by sponsors
in food listed in paragraph (d) of this section if individual
participating children are unable, because of medical or other special
dietary needs, to consume such foods. Such substitutions shall be made
only when supported by a statement from a recognized medical authority
which includes recommended alternate foods. Such statement shall be kept
on file by the sponsor.
(5) Special variations. FNS may approve variations in the food
components of the meals on an experimental or a continuing basis for any
sponsor where there is evidence that such variations are nutritionally
sound and are necessary to meet ethnic, religious, economic, or physical
needs.
(6) Temporary unavailability of milk. If emergency conditions
prevent a sponsor normally having a supply of milk from temporarily
obtaining milk deliveries, the State agency may approve the service of
breakfasts, lunches or suppers without milk during the emergency period.
(7) Continuing unavailability of milk. The inability of a sponsor to
obtain a supply of milk on a continuing basis shall not bar it from
participation in the Program. In such cases, the State agency may
approve service of meals without milk, provided that an equivalent
amount of canned, whole dry or nonfat dry milk is used in the
preparation of the milk components set forth in paragraph (d) of this
section. In addition, the State agency may approve the use of nonfat dry
milk in meals served to children participating in activities which make
the service of fluid milk impracticable, and in locations which are
unable to obtain fluid milk. Such authorization shall stipulate that
nonfat dry milk be reconstituted at normal dilution and under sanitary
conditions consistent with State and local health regulations.
(8) Additional foods. To improve the nutrition of participating
children, additional foods may be served with each meal.
[54 FR 18208, Apr. 27, 1989, as amended at 54 FR 27153, June 28, 1989;
Amdt. 2, 55 FR 1377, Jan. 14, 1990; 55 FR 13470, Apr. 10, 1990; 61 FR
37672, July 19, 1996; 62 FR 10191, Mar. 6, 1997; 64 FR 72487, Dec. 28,
1999; 64 FR 72487, Dec. 28, 1999; 65 FR 12437, Mar. 9, 2000; 65 FR
82251, Dec. 28, 2000]
[[Page 155]]
Subpart D_General Administrative Provisions
Sec. 225.17 Procurement standards.
(a) State agencies and sponsors shall comply with the standards
prescribed in the Department's Uniform Federal Assistance Regulations at
7 CFR part 3015, subpart S, in the procurement of food, supplies, goods,
and other services with Program payments.
(b) The State agency shall make available to sponsors information on
7 CFR part 3015.
(c) Sponsors may use their own procurement procedures which reflect
applicable State and local laws and regulations, provided that
procurements made with Program funds conform with provisions of this
section, as well as with procurement requirements which may be
established by the State agency, with approval of FNS, to prevent fraud,
waste, and Program abuse.
(d) The State agency shall ensure that all sponsors are aware of the
following practices specified in 7 CFR part 3015, with respect to
minority business enterprises:
(1) Including qualified minority business enterprises on
solicitation lists,
(2) Soliciting minority business enterprises whenever they are
potential sources,
(3) When economically feasible, dividing total requirements into
smaller tasks or quantities so as to permit maximum participation by
minority business enterprises,
(4) Establishing delivery schedules which will assist minority
business enterprises to meet deadlines, and
(5) Using the services and assistance of the Small Business
Administration, and the Office of Minority Business Enterprise of the
Department of Commerce as required.
Sec. 225.18 Miscellaneous administrative provisions.
(a) Grant closeout procedures. Grant closeout procedures for the
Program shall be in accordance with the Department's Uniform Federal
Assistance Regulations (7 CFR part 3015), subpart N.
(b) Termination for cause. (1) FNS may terminate a State agency's
participation in the Program in whole, or in part, whenever it is
determined that the State agency has failed to comply with the
conditions of the Program. FNS shall promptly notify the State agency in
writing of the termination and reason for the termination, together with
the effective date, and shall allow the State 30 calendar days to
respond. In instances where the State does respond, FNS shall inform the
State of its final determination no later than 30 calendar days after
the State responds.
(2) A State agency shall terminate a sponsor's participation in the
Program by written notice whenever it is determined by the State agency
that the sponsor has failed to comply with the conditions of the
Program.
(3) When participation in the Program has been terminated for cause,
any funds paid to the State agency or a sponsor or any recoveries by FNS
from the State agency or by the State agency from a sponsor shall be in
accordance with the legal rights and liabilities of the parties.
(c) Termination for convenience. FNS and the State agency may agree
to terminate the State agency's participation in the Program in whole,
or in part, when both parties agree that the continuation of the Program
would not produce beneficial results commensurate with the further
expenditure of funds. The two parties shall agree upon the termination
conditions, including the effective date, and in the case of partial
termination, the portion to be terminated. The State agency shall not
incur new obligations for the terminated portion after the effective
date, and shall cancel as many outstanding obligations as possible. The
Department shall allow full credit to the State agency for the Federal
share of the noncancellable obligation properly incurred by the State
agency prior to termination. A State agency may terminate a sponsor's
participation in the manner provided for in this paragraph.
(d) Maintenance of effort. Expenditure of funds from State and local
sources for the maintenance of food programs for children shall not be
diminished as a result of funds received under the Act and a
certification to this effect shall become part of the agreement provided
for in Sec. 225.3(c).
[[Page 156]]
(e) Program benefits. The value of benefits and assistance available
under the Program shall not be considered as income or resources of
recipients and their families for any purpose under Federal, State or
local laws, including, but not limited to, laws relating to taxation,
welfare, and public assistance programs.
(f) State requirements. Nothing contained in this part shall prevent
a State agency from imposing additional operating requirements which are
not inconsistent with the provisions of this part, provided that such
additional requirements shall not deny the Program to an area in which
poor economic conditions exist, and shall not result in a significant
number of needy children not having access to the Program. Prior to
imposing any additional requirements, the State agency must receive
approval from FNSRO.
(g) Fraud penalty. Whoever embezzles, willfully misapplies, steals,
or obtains by fraud any funds, assets, or property that are the subject
of a grant or other form of assistance under this part, whether received
directly or indirectly from the Department, or whoever receives,
conceals, or retains such funds, assets, or property to his use or gain,
knowing such funds, assets, or property have been embezzled, willfully
misapplied, stolen or obtained by fraud shall, if such funds, assets, or
property are of the value of $100 or more, be fined not more than
$100,000 or imprisoned not more than five years, or both, or if such
funds, assets, or property are of a value of less than $100, shall be
fined not more than $1,000 or imprisoned for not more than one year, or
both.
(h) Claims adjustment authority. The Secretary shall have the
authority to determine the amount of, to settle, and to adjust any claim
arising under the Program, and to compromise or deny such claim or any
part thereof. The Secretary shall also have the authority to waive such
claims if the Secretary determines that to do so would serve the
purposes of the Program. This provision shall not diminish the authority
of the Attorney General of the United States under section 516 of title
28, U.S. Code, to conduct litigation on behalf of the United States.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13471, Apr. 10, 1990;
64 FR 72488, Dec. 28, 1999]
Sec. 225.19 Regional office addresses.
Persons desiring information concerning the Program may write to the
appropriate State agency or Regional Office of FNS as indicated below:
(a) In the States of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, and Vermont: Northeast Regional
Office, FNS, U.S. Department of Agriculture, 10 Causeway Street, Room
501, Boston, MA 02222-1065.
(b) In the States of Delaware, District of Columbia, Maryland, New
Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands, and West
Virginia: Mid-Atlantic Regional Office, FNS, U.S. Department of
Agriculture, Mercer Corporate Park, 300 Corporate Boulevard,
Robbinsville, NJ 08691-1598.
(c) In the States of Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina, and Tennessee: Southeast
Regional Office, FNS, U.S. Department of Agriculture, 61 Forsyth Street,
SW., Room 8T36, Atlanta, GA 30303-3415.
(d) In the States of Illinois, Indiana, Michigan, Minnesota, Ohio,
and Wisconsin: Midwest Regional Office, FNS, U.S. Department of
Agriculture, 77 West Jackson Boulevard, 20th Floor, Chicago, IL 60604-
3507.
(e) In the States of Arkansas, Louisiana, New Mexico, Oklahoma and
Texas: Southwest Regional Office, FNS, U.S. Department of Agriculture,
1100 Commerce Street, Room 5-C-30, Dallas, TX 75242-9980.
(f) In the States of Colorado, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah and Wyoming: Mountain Plains
Regional Office, FNS, U.S. Department of Agriculture, 1244 Speer
Boulevard, Suite 903, Denver, CO 80204-3581.
(g) In the States of Alaska, American Samoa, Arizona, California,
Guam, Hawaii, Idaho, Nevada, Oregon, the Commonwealth of the Northern
Mariana Islands, and Washington: Western Regional Office, FNS, U.S.
Department of
[[Page 157]]
Agriculture, 550 Kearney Street, Room 400, San Francisco, CA 94108-2518.
[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13471, Apr. 10, 1990;
65 FR 12439, Mar. 9, 2000; 65 FR 82251, Dec. 28, 2000]
Sec. 225.20 Information collection/recordkeeping--OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control No.
------------------------------------------------------------------------
225.3-225.4................................................ 0584-0280
225.6-225.10............................................... 0584-0280
225.12-225.13.............................................. 0584-0280
225.15-225.18.............................................. 0584-0280
------------------------------------------------------------------------
[61 FR 25554, May 22, 1996]
Appendix A to Part 225--Alternate Foods for Meals
Alternate Protein Products
A. What Are the Criteria for Alternate Protein Products Used in the
Summer Food Service Program?
1. An alternate protein product used in meals planned under the
provisions in Sec. 225.16 must meet all of the criteria in this
section.
2. An alternate protein product whether used alone or in combination
with meat or other meat alternates must meet the following criteria:
a. The alternate protein product must be processed so that some
portion of the non-protein constituents of the food is removed. These
alternate protein products must be safe and suitable edible products
produced from plant or animal sources.
b. The biological quality of the protein in the alternate protein
product must be at least 80 percent that of casein, determined by
performing a Protein Digestibility Corrected Amino Acid Score (PDCAAS).
c. The alternate protein product must contain at least 18 percent
protein by weight when fully hydrated or formulated. (``When hydrated or
formulated'' refers to a dry alternate protein product and the amount of
water, fat, oil, colors, flavors or any other substances which have been
added).
d. Manufacturers supplying an alternate protein product to
participating schools or institutions must provide documentation that
the product meets the criteria in paragraphs A. 2. a through c of this
appendix.
e. Manufacturers should provide information on the percent protein
contained in the dry alternate protein product and on an as prepared
basis.
f. For an alternate protein product mix, manufacturers should
provide information on:
(1) The amount by weight of dry alternate protein product in the
package;
(2) Hydration instructions; and
(3) Instructions on how to combine the mix with meat or other meat
alternates.
B. How Are Alternate Protein Products Used in the Summer Food Service
Program?
1. Schools, institutions, and service institutions may use alternate
protein products to fulfill all or part of the meat/meat alternate
component discussed in Sec. 225.20.
2. The following terms and conditions apply:
a. The alternate protein product may be used alone or in combination
with other food ingredients. Examples of combination items are beef
patties, beef crumbles, pizza topping, meat loaf, meat sauce, taco
filling, burritos, and tuna salad.
b. Alternate protein products may be used in the dry form
(nonhydrated), partially hydrated or fully hydrated form. The moisture
content of the fully hydrated alternate protein product (if prepared
from a dry concentrated form) must be such that the mixture will have a
minimum of 18 percent protein by weight or equivalent amount for the dry
or partially hydrated form (based on the level that would be provided if
the product were fully hydrated).
C. How Are Commercially Prepared Products Used in the Summer Food
Service Program?
Schools, institutions, and service institutions may use a
commercially prepared meat or meat alternate products combined with
alternate protein products or use a commercially prepared product that
contains only alternate protein products.
[65 FR 12439, Mar. 9, 2000]
Appendix B to Part 225 [Reserved]
Appendix C to Part 225--Child Nutrition (CN) Labeling Program
1. The Child Nutrition (CN) Labeling Program is a voluntary
technical assistance program administered by the Food and Nutrition
Service (FNS) in conjunction with the Food Safety and Inspection Service
(FSIS) and Agricultural Marketing Service (AMS) of the U.S. Department
of Agriculture (USDA), and National Marine Fisheries Service of the U.S.
Department of Commerce (USDC) for the Child Nutrition Programs. This
program essentially involves the review of a manufacturer's recipe or
product formulation to determine the contribution a serving of a
commercially prepared product makes toward meal pattern requirements and
a review of the CN label statement to ensure its accuracy. CN labeled
products must be produced in accordance with all requirements set forth
in this rule.
[[Page 158]]
2. Products eligible for CN labels are as follows:
(a) Commercially prepared food products that contribute
significantly to the meat/meat alternate component of meal pattern
requirements of 7 CFR 210.10, 225.16, and 226.20 and are served in the
main dish.
(b) Juice drinks and juice drink products that contain a minimum of
50 percent full strength juice by volume.
3. For the purpose of this appendix the following definitions apply:
(a) CN label is a food product label that contains a CN label
statement and CN logo as defined in paragraph 3(b) and (c) below.
(b) The CN logo (as shown below) is a distinct border which is used
around the edges of a ``CN label statement'' as defined in paragraph
3(c).
[GRAPHIC] [TIFF OMITTED] TC17SE91.006
(c) The CN label statement includes the following:
(1) The product identification number (assigned by FNS);
(2) The statement of the product's contribution toward meal pattern
requirements of 7 CFR 210.10, 220.8, 225.16, and 226.20. The statement
shall identify the contribution of a specific portion of a meat/meat
alternate product toward the meat/meat alternate, bread/bread alternate,
and/or vegetable/fruit component of the meal pattern requirements. For
juice drinks and juice drink products the statement shall identify their
contribution toward the vegetable/fruit component of the meal pattern
requirements.
(3) Statement specifying that the use of the CN logo and CN
statement was authorized by FNS, and
(4) The approval date.
For example:
[GRAPHIC] [TIFF OMITTED] TC17SE91.007
(d) Federal inspection means inspection of food products by FSIS,
AMS or USDC.
4. Food processors or manufacturers may use the CN label statement
and CN logo as defined in paragraph 3 (b) and (c) under the following
terms and conditions:
(a) The CN label must be reviewed and approved at the national level
by the Food and Nutrition Service and appropriate USDA or USDC Federal
agency responsible for the inspection of the product.
(b) The CN labeled product must be produced under Federal inspection
by USDA or USDC. The Federal inspection must be performed in accordance
with an approved partial or total quality control program or standards
established by the appropriate Federal inspection service.
(c) The CN label statement must be printed as an integral part of
the product label along with the product name, ingredient listing, the
inspection shield or mark for the appropriate inspection program, the
establishment number where appropriate and the manufacturer's or
distributor's name and address.
(1) The inspection marking for CN labeled non-meat, non-poultry, and
non-seafood products with the exception of juice drinks and juice drink
products is established as follows:
[[Page 159]]
[GRAPHIC] [TIFF OMITTED] TC17SE91.008
(d) Yields for determining the product's contribution toward meal
pattern requirements must be calculated using the Food Buying Guide for
Child Nutrition Programs (Program Aid Number 1331).
5. In the event a company uses the CN logo and CN label statement
inappropriately, the company will be directed to discontinue the use of
the logo and statement and the matter will be referred to the
appropriate agency for action to be taken against the company.
6. Products that bear a CN label statement as set forth in paragraph
3(c) carry a warranty. This means that if a food service authority
participating in the child nutrition programs purchases a CN labeled
product and uses it in accordance with the manufacturer's directions,
the school or institution will not have an audit claim filed against it
for the CN labeled product for noncompliance with the meal pattern
requirements of 7 CFR 210.10, 220.8, 225.16, and 226.20. If a State or
Federal auditor finds that a product that is CN labeled does not
actually meet the meal pattern requirements claimed on the label, the
auditor will report this finding to FNS. FNS will prepare a report on
the findings and send it to the appropriate divisions of FSIS and AMS of
the USDA, National Marine Fisheries Service of the USDC, Food and Drug
Administration, or the Department of Justice for action against the
company. Any or all of the following courses of action may be taken: (a)
The company's CN label may be revoked for a specific period of time; (b)
The appropriate agency may pursue a misbranding or mislabeling action
against the company producing the product; (c) The company's name will
be circulated to regional FNS offices; and (d) FNS will require the food
service program involved to notify the State agency of the labeling
violation.
7. FNS is authorized to issue operational policies, procedures, and
instructions for the CN Labeling Program. To apply for a CN label and to
obtain additional information on CN label application procedures, write
to: CN Labels, U.S. Department of Agriculture, Food and Nutrition
Service, Nutrition and Technical Services Division, 3101 Park Center
Drive, Alexandria, Virginia 22302.
PART 226_CHILD AND ADULT CARE FOOD PROGRAM--Table of Contents
Subpart A_General
Sec.
226.1 General purpose and scope.
226.2 Definitions.
226.3 Administration.
Subpart B_Assistance to States
226.4 Payments to States and use of funds.
226.5 Donation of commodities.
Subpart C_State Agency Provisions
226.6 State agency administrative responsibilities.
226.7 State agency responsibilities for financial management.
226.8 Audits.
Subpart D_Payment Provisions
226.9 Assignment of rates of reimbursement for centers.
226.10 Program payment procedures.
226.11 Program payments for centers.
226.12 Administrative payments to sponsoring organizations for day care
homes.
226.13 Food service payments to sponsoring organizations for day care
homes.
226.14 Claims against institutions.
Subpart E_Operational Provisions
226.15 Institution provisions.
226.16 Sponsoring organization provisions.
226.17 Child care center provisions.
226.18 Day care home provisions.
226.19 Outside-school-hours care center provisions.
226.19a Adult day care center provisions.
226.20 Requirements for meals.
226.21 Food service management companies.
226.22 Procurement standards.
226.23 Free and reduced-price meals.
Subpart F_Food Service Equipment Provisions
226.24 Property management requirements.
Subpart G_Other Provisions
226.25 Other provisions.
226.26 Program information.
226.27 Information collection/recordkeeping--OMB assigned control
numbers.
Appendix A to Part 226--Alternate Foods for Meals
Appendix B to Part 226 [Reserved]
Appendix C to Part 226--Child Nutrition (CN) Labeling Program
Authority: Secs. 9, 11, 14, 16, and 17, Richard B. Russell National
School Lunch Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765 and
1766).
Source: 47 FR 36527, Aug. 20, 1982, unless otherwise noted.
Editorial Note: Nomenclature changes to part 226 appear at 70 FR
43261, July 27, 2005.
[[Page 160]]
Subpart A_General
Sec. 226.1 General purpose and scope.
This part announces the regulations under which the Secretary of
Agriculture will carry out the Child and Adult Care Food Program.
Section 17 of the National School Lunch Act, as amended, authorizes
assistance to States through grants-in-aid and other means to initiate,
maintain, and expand nonprofit food service programs for children or
adult participants in nonresidential institutions which provide care.
The Program is intended to enable such institutions to integrate a
nutritious food service with organized care services for enrolled
participants. Payments will be made to State agencies or FNS Regional
Offices to enable them to reimburse institutions for food service to
enrolled participants.
[53 FR 52587, Dec. 28, 1988, as amended by Amdt. 22, 55 FR 1377, Jan.
14, 1990]
Sec. 226.2 Definitions.
Act means the National School Lunch Act, as amended.
Administrative costs means costs incurred by an institution related
to planning, organizing, and managing a food service under the Program,
and allowed by the State agency financial management instruction. These
administrative costs may include administrative expenses associated with
outreach and recruitment of unlicensed family or group day care homes
and the allowable licensing-related expenses of such homes.
Administrative review means the fair hearing provided upon request
to:
(a) An institution that has been given notice by the State agency of
any action or proposed action that will affect their participation or
reimbursement under the Program, in accordance with Sec. 226.6(k);
(b) A principal or individual responsible for an institution's
serious deficiency after the responsible principal or responsible
individual has been given a notice of intent to disqualify them from the
Program; and
(c) A day care home that has been given a notice of proposed
termination for cause.
Administrative review official means the independent and impartial
official who conducts the administrative review held in accordance with
Sec. 226.6(k).
Adult means, for the purposes of the collection of social security
numbers as a condition of eligibility for free or reduced-price meals,
any individual 21 years of age or older.
Adult day care center means any public or private nonprofit
organization or any for-profit center (as defined in this section) which
(a) is licensed or approved by Federal, State or local authorities to
provide nonresidential adult day care services to functionally impaired
adults (as defined in this section) or persons 60 years of age or older
in a group setting outside their homes or a group living arrangement on
a less than 24-hour basis and (b) provides for such care and services
directly or under arrangements made by the agency or organization
whereby the agency or organization maintains professional management
responsibility for all such services. Such centers shall provide a
structured, comprehensive program that provides a variety of health,
social and related support services to enrolled adult participants
through an individual plan of care.
Adult day care facility means a licensed or approved adult day care
center under the auspices of a sponsoring organization.
Adult participant means a person enrolled in an adult day care
center who is functionally impaired (as defined in this section) or 60
years of age or older.
Advanced payments means financial assistance made available to an
institution for its Program costs prior to the month in which such costs
will be incurred.
Block claim means a claim for reimbursement submitted by a facility
on which the number of meals claimed for one or more meal type
(breakfast, lunch, snack, or supper) is identical for 15 consecutive
days within a claiming period.
CACFP child care standards means the Child and Adult Care Food
Program child care standards developed by the Department for alternate
approval of child care centers, outside-school-hours care centers, and
day care homes by
[[Page 161]]
the State agency under the provisions of Sec. 226.6(d)(2) and (3).
Center means a child care center, an adult day care center, or an
outside-school-hours care center.
Child care center means any public or private nonprofit institution
or facility (except day care homes), or any for-profit center, as
defined in this section, that is licensed or approved to provide
nonresidential child care services to enrolled children, primarily of
preschool age, including but not limited to day care centers, settlement
houses, neighborhood centers, Head Start centers and organizations
providing day care services for children with disabilities. Child care
centers may participate in the Program as independent centers or under
the auspices of a sponsoring organization.
Child care facility means a licensed or approved child care center,
day care home, or outside-school-hours care center under the auspices of
a sponsoring organization.
Children means (a) persons 12 years of age and under, (b) children
of migrant workers 15 years of age and under, and (c) persons with
mental or physical handicaps, as defined by the State, enrolled in an
institution or a child care facility serving a majority of persons 18
years of age and under.
Claiming percentage means the ratio of the number of enrolled
participants in an institution in each reimbursement category (free,
reduced-price or paid) to the total of enrolled participants in the
institution.
Current income means income received during the month prior to
application for free or reduced-price meals. If such income does not
accurately reflect the household's annual income, income shall be based
on the projected annual household income. If the prior year's income
provides an accurate reflection of the household's current annual
income, the prior year may be used as a base for the projected annual
income.
Day care home means an organized nonresidential child care program
for children enrolled in a private home, licensed or approved as a
family or group day care home and under the auspices of a sponsoring
organization.
Days means calendar days unless otherwise specified.
Department means the U.S. Department of Agriculture.
Disclosure means individual children's program eligibility
information obtained through the free and reduced price meal eligibility
process that is revealed or used for a purpose other than for the
purpose for which the information was obtained. The term refers to
access, release, or transfer of personal data about children by means of
print, tape, microfilm, microfiche, electronic communication or any
other means.
Disqualified means the status of an institution, a responsible
principal or responsible individual, or a day care home that is
ineligible for participation.
Documentation means:
(a) The completion of the following information on a free and
reduced-price application:
(1) Names of all household members;
(2) Income received by each household member, identified by source
of income (such as earnings, wages, welfare, pensions, support payments,
unemployment compensation, social security and other cash income);
(3) The signature of an adult household member; and
(4) The social security number of the adult household member who
signs the application, or an indication that he/she does not possess a
social security number; or
(b) For a child who is a member of a food stamp or FDPIR household
or who is a TANF recipient, ``documentation'' means the completion of
only the following information on a free and reduced price application:
(1) The name(s) and appropriate food stamp, FDPIR or TANF case
number(s) for the child(ren); and
(2) The signature of an adult member of the household; or
(c) For a child in a tier II day care home who is a member of a
household participating in a Federally or State supported child care or
other benefit program with an income eligibility limit that does not
exceed the eligibility standard for free or reduced price meals:
[[Page 162]]
(1) The name(s), appropriate case number(s) (if the program utilizes
case numbers), and name(s) of the qualifying program(s) for the
child(ren), and the signature of an adult member of the household; or
(2) If the sponsoring organization or day care home possesses it,
official evidence of the household's participation in a qualifying
program (submission of a free and reduced price application by the
household is not required in this case); or
(d) For an adult participant who is a member of a food stamp or
FDPIR household or is an SSI or Medicaid participant, as defined in this
section, ``documentation'' means the completion of only the following
information on a free and reduced price application:
(1) The name(s) and appropriate food stamp or FDPIR case number(s)
for the participant(s) or the adult participant's SSI or Medicaid
identification number, as defined in this section; and
(2) The signature of an adult member of the household; or
(e) For a child who is a Head Start participant, the Head Start
statement of income eligibility issued upon initial enrollment in the
Head Start Program or, if such statement is unavailable, other
documentation from Head Start officials that the child's family meets
the Head Start Program's low-income criteria.
Emergency shelter means a public or private nonprofit organization
whose primary purpose is to provide temporary shelter and food services
to homeless families with children.
Enrolled child means a child whose parent or guardian has submitted
to an institution a signed document which indicates that the child is
enrolled for child care. In addition, for the purposes of calculations
made by sponsoring organizations of family day care homes in accordance
with Sec. Sec. 226.13(d)(3)(ii) and 226.13(d)(3)(iii), ``enrolled
child'' (or ``child in attendance'') means a child whose parent or
guardian has submitted a signed document which indicates that the child
is enrolled for child care; who is present in the day care home for the
purpose of child care; and who has eaten at least one meal during the
claiming period.
Enrolled participant means an ``Enrolled child'' (as defined in this
section) or ``Adult participant'' (as defined in this section).
Expansion payments means financial assistance made available to a
sponsoring organization for its administrative expenses associated with
expanding a food service program to day care homes located in low-income
or rural areas. These expansion payments may include administrative
expenses associated with outreach and recruitment of unlicensed family
or group day care homes and the allowable licensing-related expenses of
such homes.
Facility means a sponsored center or a family day care home.
Family means, in the case of children, a group of related or
nonrelated individuals, who are not residents of an institution or
boarding house, but who are living as one economic unit or, in the case
of adult participants, the adult participant, and if residing with the
adult participant, the spouse and dependent(s) of the adult participant.
FDPIR household means any individual or group of individuals which
is currently certified to receive assistance as a household under the
Food Distribution Program on Indian Reservations.
Fiscal Year means a period of 12 calendar months beginning October 1
of any year and ending with September 30 of the following year.
FNS means the Food and Nutrition Service of the Department.
FNSRO means the appropriate Regional Office of the Food and
Nutrition Service.
Food service equipment assistance means Federal financial assistance
formerly made available to State agencies to assist institutions in the
purchase or rental of equipment to enable institutions to establish,
maintain or expand food service under the Program.
Food service management company means an organization other than a
public or private nonprofit school, with which an institution may
contract for preparing and, unless otherwise provided for, delivering
meals, with or without milk for use in the Program.
Food Stamp household means any individual or group of individuals
which is
[[Page 163]]
currently certified to receive assistance as a household under the Food
Stamp Program.
For-profit center means a Child care center, Outside-school-hours
care center, or Adult day care center providing nonresidential care to
adults or children that does not qualify for tax-exempt status under the
Internal Revenue Code of 1986. For-profit centers serving adults must
meet the criteria described in paragraph (a) of this definition; for-
profit centers serving children must meet the criteria described in
paragraphs (b)(1) or (b)(2) of this definition.
(a) A for-profit center serving adults must meet the definition of
Adult day care center as defined in this section and, during the
calendar month preceding initial application or reapplication, the
center receives compensation from amounts granted to the States under
title XIX or title XX and twenty-five percent of the adults enrolled in
care are beneficiaries of title XIX, title XX, or a combination of
titles XIX and XX of the Social Security Act.
(b) A for-profit center serving children must meet the definition of
Child care center or Outside-school-hours care center as defined in this
section and one of the following conditions during the calendar month
preceding initial application or reapplication:
(1) Twenty-five percent of the children in care (enrolled or
licensed capacity, whichever is less) are eligible for free or reduced-
price meals; or
(2) Twenty-five percent of the children in care (enrolled or
licensed capacity, whichever is less) receive benefits from title XX of
the Social Security Act and the center receives compensation from
amounts granted to the States under title XX.
Free meal means a meal served under the Program to a participant
from a family which meets the income standards for free school meals; or
to a child who is automatically eligible for free meals by virtue of
food stamp, FDPIR, or TANF recipiency; or to a child who is a Head Start
participant; or to an adult participant who is automatically eligible
for free meals by virtue of food stamp or FDPIR recipiency or is a SSI
or Medicaid participant. Regardless of whether the participant qualified
for free meals by virtue of meeting one of the criteria of this
definition, neither the participant nor any member of their family shall
be required to pay or to work in the food service program in order to
receive a free meal.
Functionally impaired adult means chronically impaired disabled
persons 18 years of age or older, including victims of Alzheimer's
disease and related disorders with neurological and organic brain
dysfunction, who are physically or mentally impaired to the extent that
their capacity for independence and their ability to carry out
activities of daily living is markedly limited. Activities of daily
living include, but are not limited to, adaptive activities such as
cleaning, shopping, cooking, taking public transportation, maintaining a
residence, caring appropriately for one's grooming or hygiene, using
telephones and directories, or using a post office. Marked limitations
refer to the severity of impairment, and not the number of limited
activities, and occur when the degree of limitation is such as to
seriously interfere with the ability to function independently.
Group living arrangement means residential communities which may or
may not be subsidized by federal, State or local funds but which are
private residences housing an individual or a group of individuals who
are primarily responsible for their own care and who maintain a presence
in the community but who may receive on-site monitoring.
Head Start participant means a child currently receiving assistance
under a Federally-funded Head Start Program who is categorically
eligible for free meals in the CACFP by virtue of meeting Head Start's
low-income criteria.
Household means ``family'', as defined in Sec. 226.2 (``Family'').
Household contact means a contact made by a sponsoring organization
or a State agency to an adult member of a household with a child in a
family day care home or a child care center in order to verify the
attendance and enrollment of the child and the specific meal service(s)
which the child routinely receives while in care.
Income standards means the family-size and income standards
prescribed
[[Page 164]]
annually by the Secretary for determining eligibility for free and
reduced-price meals under the National School Lunch Program and the
School Breakfast Program.
Income to the program means any funds used in an institution's food
service program, including, but not limited to all monies, other than
Program payments, received from other Federal, State, intermediate, or
local government sources; participant's payments for meals and food
service fees; income from any food sales to adults; and other income,
including cash donations or grants from organizations or individuals.
Independent center means a child care center, outside-school-hours
care center or adult day care center which enters into an agreement with
the State agency to assume final administrative and financial
responsibility for Program operations.
Infant cereal means any iron-fortified dry cereal specially
formulated for and generally recognized as cereal for infants that is
routinely mixed with breast milk or iron-fortified infant formula prior
to consumption.
Infant formula means any iron-fortified formula intended for dietary
use solely as a food for normal, healthy infants; excluding those
formulas specifically formulated for infants with inborn errors of
metabolism or digestive or absorptive problems. Infant formula, as
served, must be in liquid state at recommended dilution.
Institution means a sponsoring organization, child care center,
outside-school-hours care center, emergency shelter or adult day care
center which enters into an agreement with the State agency to assume
final administrative and financial responsibility for Program
operations.
Internal controls means the policies, procedures, and organizational
structure of an institution designed to reasonably assure that:
(a) The Program achieves its intended result;
(b) Program resources are used in a manner that protects against
fraud, abuse, and mismanagement and in accordance with law, regulations,
and guidance; and
(c) Timely and reliable Program information is obtained, maintained,
reported, and used for decision-making.
Key Element Reporting System (KERS) means a comprehensive national
system for reporting critical key element performance data on the
operation of the program in institutions.
Low-income area means a geographical area in which at least 50
percent of the children are eligible for free or reduced price school
meals under the National School Lunch Program and the School Breakfast
Program, as determined in accordance with paragraphs (b) and (c),
definition of tier I day care home.
Meals means food which is served to enrolled participants at an
institution, child care facility or adult day care facility and which
meets the nutritional requirements set forth in this part.
Medicaid means Title XIX of the Social Security Act.
Medicaid participant means an adult participant who receives
assistance under title XIX of the Social Security Act, the Grant to
States for Medical Assistance Programs--Medicaid.
Milk means pasteurized fluid types of unflavored or flavored whole
milk, lowfat milk, skim milk, or cultured buttermilk which meet State
and local standards for such milk, except that, in the meal pattern for
infants (0 to 1 year of age), milk means breast milk or iron-fortified
infant formula. In Alaska, Hawaii, American Samoa, Guam, Puerto Rico,
the Trust Territory of the Pacific Islands, the Northern Mariana
Islands, and the Virgin Islands if a sufficient supply of such types of
fluid milk cannot be obtained, ``milk'' shall include reconstituted or
recombined milk. All milk should contain vitamins A and D at levels
specified by the Food and Drug Administration and be consistent with
State and local standards for such milk.
National disqualified list means the list, maintained by the
Department, of institutions, responsible principals and responsible
individuals, and day care homes disqualified from participation in the
Program.
New institution means an institution applying to participate in the
Program
[[Page 165]]
for the first time, or an institution applying to participate in the
Program after a lapse in participation.
Nonpricing program means an institution in which there is no
separate identifiable charge made for meals served to participants.
Nonprofit food service means all food service operations conducted
by the institution principally for the benefit of enrolled participants,
from which all of the Program reimbursement funds are used solely for
the operations or improvement of such food service.
Nonresidential means that the same participants are not maintained
in care for more than 24 hours on a regular basis.
Notice means a letter sent by certified mail, return receipt (or the
equivalent private delivery service), by facsimile, or by email, that
describes an action proposed or taken by a State agency or FNS with
regard to an institution's Program reimbursement or participation.
Notice also means a letter sent by certified mail, return receipt (or
the equivalent private delivery service), by facsimile, or by email,
that describes an action proposed or taken by a sponsoring organization
with regard to a day care home's participation. The notice must specify
the action being proposed or taken and the basis for the action, and is
considered to be received by the institution or day care home when it is
delivered, sent by facsimile, or sent by email. If the notice is
undeliverable, it is considered to be received by the institution,
responsible principal or responsible individual, or day care home five
days after being sent to the addressee's last known mailing address,
facsimile number, or email address.
OIG means the Office of the Inspector General of the Department.
Operating costs means expenses incurred by an institution in serving
meals to participants under the Program, and allowed by the State agency
financial management instruction.
Outside-school-hours care center means a public or private nonprofit
institution or facility (except day care homes), or a For-profit center
as defined in this section, that is licensed or approved to provide
organized nonresidential child care services to children during hours
outside of school. Outside-school-hours care centers may participate in
the Program as independent centers or under the auspices of a sponsoring
organization.
Participants means ``Children'' or ``Adult participants'' as defined
in this section.
Personal property means property of any kind except real property.
It may be tangible--having physical existence--or intangible--having no
physical existence such as patents, inventions, and copyrights.
Pricing program means an institution in which a separate
identifiable charge is made for meals served to participants.
Principal means any individual who holds a management position
within, or is an officer of, an institution or a sponsored center,
including all members of the institution's board of directors or the
sponsored center's board of directors.
Program means the Child and Adult Care Food Program authorized by
section 17 of the National School Lunch Act, as amended.
Program payments means financial assistance in the form of start-up
payments, expansion payments, advance payments, or reimbursement paid or
payable to institutions for operating costs and administrative costs.
Reduced-price meal means a meal served under the Program to a
participant from a family which meets the income standards for reduced-
price school meals. Any separate charge imposed shall be less than the
full price of the meal, but in no case more than 40 cents for a lunch or
supper, 30 cents for a breakfast, and 15 cents for a supplement, and for
which neither the participant nor any member of his family is required
to work in the food service program.
Reimbursement means Federal financial assistance paid or payable to
institutions for Program costs within the rates assigned by the State
agency.
Renewing institution means an institution that is participating in
the Program at the time it submits a renewal application.
Responsible principal or responsible individual means:
[[Page 166]]
(a) A principal, whether compensated or uncompensated, who the State
agency or FNS determines to be responsible for an institution's serious
deficiency;
(b) Any other individual employed by, or under contract with, an
institution or sponsored center, who the State agency or FNS determines
to be responsible for an institution's serious deficiency; or
(c) An uncompensated individual who the State agency or FNS
determines to be responsible for an institution's serious deficiency.
Rural area means any geographical area in a county which is not a
part of a Metropolitan Statistical Area or any ``pocket'' within a
Metropolitan Statistical Area which, at the option of the State agency
and with FNSRO concurrence, is determined to be geographically isolated
from urban areas.
SSI participant means an adult participant who receives assistance
under title XVI of the Social Security Act, the Supplemental Security
Income (SSI) for the Aged, Blind and Disabled Program.
School year means a period of 12 calendar months beginning July 1 of
any year and ending June 30 of the following year.
Seriously deficient means the status of an institution or a day care
home that has been determined to be non-compliant in one or more aspects
of its operation of the Program.
Sponsoring organization means a public or nonprofit private
organization which is entirely responsible for the administration of the
food program in: (a) One or more day care homes; (b) a child care
center, outside-school-hours care centers, or adult day care center
which is a legally distinct entity from the sponsoring organization; (c)
two or more child care centers, outside-school-hours care centers, or
adult day care centers; or (d) any combination of child care centers,
adult day care centers, day care homes, and outside-school-hours care
centers. The term ``sponsoring organization'' also includes a For-profit
center, as defined in this section, that is entirely responsible for
administration of the Program in any combination of two or more child
care centers, at-risk afterschool care centers, adult day care centers,
or outside-school-hours care centers, provided that the centers are part
of the same legal entity as the sponsoring organization.
Start-up payments means financial assistance made available to a
sponsoring organization for its administrative expenses associated with
developing or expanding a food service program in day care homes and
initiating successful Program operations. These start-up payments may
include administrative expenses associated with outreach and recruitment
of unlicensed family or group day care homes and the allowable
licensing-related expenses of such homes.
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
the Trust Territory of the Pacific Islands, and the Northern Mariana
Islands.
State agency means the State educational agency or any other State
agency that has been designated by the Governor or other appropriate
executive, or by the legislative authority of the State, and has been
approved by the Department to administer the Program within the State or
in States in which FNS administers the Program, FNSRO. This also may
include a State agency other than the existing CACFP State Agency, when
such agency is designated by the Governor of the State to administer
only the adult day care component of the CACFP.
State agency list means an actual paper or electronic list, or the
retrievable paper records, maintained by the State agency, that includes
a synopsis of information concerning seriously deficient institutions
and providers terminated for cause in that State. The list must be made
available to FNS upon request, and must include the following
information:
(a) Institutions determined to be seriously deficient by the State
agency, including the names and mailing addresses of the institutions,
the basis for each serious deficiency determination, and the status of
the institutions as they move through the possible subsequent stages of
corrective action, proposed termination, suspension, agreement
termination, and/or disqualification, as applicable;
[[Page 167]]
(b) Responsible principals and responsible individuals who have been
disqualified from participation by the State agency, including their
names, mailing addresses, and dates of birth; and
(c) Day care home providers whose agreements have been terminated
for cause by a sponsoring organization in the State, including their
names, mailing addresses, and dates of birth.
State Children's Health Insurance Program (SCHIP) means the State
medical assistance program under title XXI of the Social Security Act (
42 U.S.C. 1397aa et seq.).
Suspended means the status of an institution or day care home that
is temporarily ineligible for participation (including Program
payments).
Suspension review means the review provided, upon the institution's
request, to an institution that has been given a notice of intent to
suspend participation (including Program payments), based on a
determination that the institution has knowingly submitted a false or
fraudulent claim.
Suspension review official means the independent and impartial
official who conducts the suspension review.
Termination for cause means the termination of a day care home's
Program agreement by the sponsoring organization due to the day care
home's violation of the agreement.
TANF recipient means an individual or household receiving assistance
(as defined in 45 CFR 260.31) under a State-administered Temporary
Assistance to Needy Families program.
Termination for convenience means termination of a day care home's
Program agreement by either the sponsoring organization or the day care
home, due to considerations unrelated to either party's performance of
Program responsibilities under the agreement.
Tier I day care home means (a) a day care home that is operated by a
provider whose household meets the income standards for free or reduced-
price meals, as determined by the sponsoring organization based on a
completed free and reduced price application, and whose income is
verified by the sponsoring organization of the home in accordance with
Sec. 226.23(h)(6);
(b) A day care home that is located in an area served by a school
enrolling elementary students in which at least 50 percent of the total
number of children enrolled are certified eligible to receive free or
reduced price meals; or
(c) A day care home that is located in a geographic area, as defined
by FNS based on census data, in which at least 50 percent of the
children residing in the area are members of households which meet the
income standards for free or reduced price meals.
Tier II day care home means a day care home that does not meet the
criteria for a Tier I day care home.
Title XVI means Title XVI of the Social Security Act which
authorizes the Supplemental Security Income for the Aged, Blind, and
Disabled Program--SSI.
Title XIX means Title XIX of the Social Security Act which
authorizes the Grants to States for Medical Assistance Programs--
Medicaid.
Title XX means Title XX of the Social Security Act.
Unannounced review means an on-site review for which no prior
notification is given to the facility or institution.
Uniform Federal Assistance Regulations means the Department's
regulations, 7 CFR part 3015, establishing Department-wide policies and
standards for administration of grants and cooperative agreements.
Verification means a review of the information reported by
institutions to the State agency regarding the eligibility of
participants for free or reduced-price meals, and, in addition, for a
pricing program, confirmation of eligibility for free or reduced-price
benefits under the program. Verification for a pricing program shall
include confirmation of income eligibility and, at State discretion, any
other information required on the application which is defined as
documentation in Sec. 226.2. Such verification may be accomplished by
examining information (e.g., wage stubs, etc.) provided by the household
or other sources of information as specified in Sec. 226.23(h)(2)(iv).
However, if a food stamp, FDPIR or TANF case number is provided for a
child, verification for such child shall include only confirmation that
the child is included in a currently certified food stamp or
[[Page 168]]
FDPIR household or is a TANF recipient. If a Head Start statement of
income eligibility is provided for a child, verification for such child
shall include only confirmation that the child is a Head Start
participant. For an adult participant, if a food stamp or FDPIR case
number or SSI or Medicaid assistance identification number is provided,
verification for such participant shall include only confirmation that
the participant is included in a currently certified food stamp or FDPIR
household or is a current SSI or Medicaid participant.
Yogurt means commercially coagulated milk products obtained by the
fermentation of specific bacteria, that meet milk fat or milk solid
requirements to which flavoring foods or ingredients may be added. These
products are covered by the Food and Drug Administration's Standard of
Identity for yogurt, lowfat yogurt, and nonfat yogurt, (21 CFR 131.200),
(21 CFR 131.203), (21 CFR 131.206), respectively.
[47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at
48 FR 21529, May 13, 1983; 48 FR 41142, Sept. 14, 1983; 50 FR 19310, May
8, 1985; 51 FR 31316, Sept. 3, 1986; 52 FR 36906, Oct. 2, 1987; 53 FR
52587, Dec. 28, 1988; 54 FR 27153, June 28, 1989; Amdt. 22, 55 FR 1377,
Jan. 14, 1990; 61 FR 25554, May 22, 1996; 62 FR 901, Jan. 7, 1997; 62 FR
23617, May 1, 1997; 63 FR 9104, Feb. 24, 1998; 63 FR 9727, Feb. 26,
1998; 64 FR 61775, Nov. 15, 1999; 66 FR 2203, Jan. 11, 2001; 67 FR
43476, June 27, 2002; 69 FR 53535, Sept. 1, 2004; 70 FR 43261, July 27,
2005]
Sec. 226.3 Administration.
(a) Within the Department, FNS shall act on behalf of the Department
in the administration of the Program.
(b) Within the States, responsibility for the administration of the
Program shall be in the State agency, except that if FNS has
continuously administered the Program in any State since October 1,
1980, FNS shall continue to administer the Program in that State. A
State in which FNS administers the Program may, upon request to FNS,
assume administration of the Program.
(c) Each State agency desiring to take part in the Program shall
enter into a written agreement with the Department for the
administration of the Program in the State in accordance with the
provisions of this part. This agreement shall cover the operation of the
Program during the period specified therein and may be extended by
consent of both parties.
(d) FNSRO shall, in each State in which it administers the Program,
have available all funds and assume all responsibilities of a State
agency as set forth in this part.
Subpart B_Assistance to States
Sec. 226.4 Payments to States and use of funds.
(a) Availability of funds. For each fiscal year based on funds
provided to the Department, FNS shall make funds available to each State
agency to reimburse institutions for their costs in connection with food
service operations, including administrative expenses, under this part.
Funds shall be made available in an amount no less than the sum of the
totals obtained under paragraphs (b), (c), (d), (e) and (h) of this
section. However, in any fiscal year, the aggregate amount of assistance
provided to a State under this part shall not exceed the sum of the
Federal funds provided by the State to participating institutions within
the State for that fiscal year and any funds used by the State under
paragraphs (h) and (j) of this section.
(b) Center funds. For meals served to participants in child care
centers, adult day care centers and outside-school-hours care centers,
funds shall be made available to each State agency in an amount no less
than the sum of the products obtained by multiplying:
(1) The number of breakfasts served in the Program within the State
to participants from families that do not satisfy the eligibilty
standards for free and reduced-price school meals enrolled in
institutions by the national average payment rate for breakfasts for
such participants under section 4 of the Child Nutrition Act of 1966;
(2) The number of breakfasts served in the Program within the State
to participants from families that satisfy the eligibilty standards for
free school meals enrolled in institutions by the national average
payment rate for free breakfasts under section 4 of the Child Nutrition
Act of 1966;
[[Page 169]]
(3) The number of breakfasts served to participants from families
that satisfy the eligibilty standard for reduced-price school meals
enrolled in institutions by the national average payment rate for
reduced-price school breakfasts under section 4 of the Child Nutrition
Act of 1966;
(4) The number of lunches and suppers served in the Program within
the State by the national average payment rate for lunches under section
4 of the National School Lunch Act. (All lunches and suppers served in
the State are funded under this provision);
(5) The number of lunches and suppers served in the Program within
the State to participants from families that satisfy the eligibilty
standard for free school meals enrolled in institutions by the national
average payment rate for free lunches under section 11 of the National
School Lunch Act;
(6) The number of lunches and suppers served in the Program within
the State to participants from families that satisfy the eligibilty
standard for reduced-price school meals enrolled in institutions by the
national average payment rate for reduced-price lunches under section 11
of the National School Lunch Act;
(7) The number of supplements served in the Program within the State
to participants from families that do not satisfy the eligibilty
standards for free and reduced-price school meals enrolled in
institutions by 2.75 cents;
(8) The number of supplements served in the Program within the State
to participants from families that satisfy the eligibilty standard for
free school meals enrolled in institutions by 30 cents;
(9) The number of supplements served in the Program within the State
to participants from families that satisfy the eligibilty standard for
reduced-price school meals enrolled in institutions by 15 cents.
(c) Day care home funds. For meals served to children in day care
homes, funds shall be made available to each State agency in an amount
no less than the sum of products obtained by multiplying:
(1) The number of breakfasts served in the Program within the State
to children enrolled in tier I day care homes by the current tier I day
care home rate for breakfasts;
(2) The number of breakfasts served in the Program within the State
to children enrolled in tier II day care homes that have been determined
eligible for free or reduced price meals by the current tier I day care
home rate for breakfasts;
(3) The number of breakfasts served in the Program within the State
to children enrolled in tier II day care homes that do not satisfy the
eligibility standards for free or reduced price meals, or to children
from whose households applications were not collected, by the current
tier II day care home rate for breakfasts;
(4) The number of lunches and suppers served in the Program within
the State to children enrolled in tier I day care homes by the current
tier I day care home rate for lunches/suppers;
(5) The number of lunches and suppers served in the Program within
the State to children enrolled in tier II day care homes that have been
determined eligible for free or reduced price meals by the current tier
I day care home rate for lunches/suppers;
(6) The number of lunches and suppers served in the Program within
the State to children enrolled in tier II day care homes that do not
satisfy the eligibility standards for free or reduced price meals, or to
children from whose households applications were not collected, by the
current tier II day care home rate for lunches/suppers;
(7) The number of supplements served in the Program within the State
to children enrolled in tier I day care homes by the current tier I day
care home rate for supplements;
(8) The number of supplements served in the Program within the State
to children enrolled in tier II day care homes that have been determined
eligible for free or reduced price meals by the current tier I day care
home rate for supplements; and
(9) The number of supplements served in the Program within the State
to children enrolled in tier II day care homes that do not satisfy the
eligibility standards for free or reduced price meals, or to children
from whose
[[Page 170]]
households applications were not collected, by the current tier II day
care home rate for supplements.
(d) Administrative funds. For administrative payments to day care
home sponsoring organizations, funds shall be made available to each
State agency in an amount not less than the product obtained each month
by multiplying the number of day care homes participating under each
sponsoring organization within the State by the applicable rates
specified in Sec. 226.12(a)(3).
(e) Start-up and expansion funds. For start-up and expansion
payments to eligible sponsoring organizations, funds shall be made
available to each State agency in an amount equal to the total amount of
start-up and expansion payments made in the most recent period for which
reports are available for that State or on the basis of estimates by
FNS.
(f) Funding assurance. FNS shall ensure that, to the extent funds
are appropriated, each State has sufficient Program funds available for
providing start-up, expansion and advance payments in accordance with
this part.
(g) Rate adjustments. FNS shall publish a notice in the Federal
Register to announce each rate adjustment. FNS shall adjust the
following rates on the specified dates:
(1) The rates for meals served in tier I and tier II day care homes
shall be adjusted annually, on July 1 (beginning July 1, 1997), on the
basis of changes in the series for food at home of the Consumer Price
Index for All Urban Consumers published by the Department of Labor. Such
adjustments shall be rounded to the nearest lower cent based on changes
measured over the most recent twelve-month period for which data are
available. The adjustments shall be computed using the unrounded rate in
effect for the preceding school year.
(2) The rate for meals served in child care centers, adult day care
centers and outside-school-hours care centers shall be adjusted
annually, on July 1, on the basis of changes in the series for food away
from home of the Consumer Price Index for All Urban Consumers published
by the Department of Labor. Such adjustment must be rounded to the
nearest lower cent, based on changes measured over the most recent
twelve-month period for which data are available. The adjustment to the
rates must be computed using the unrounded rate in effect for the
preceding year.
(3) The rate for administrative payments to day care home sponsoring
organizations shall be adjusted annually, on July 1, on the basis of
changes in the series for all items of the Consumer Price Index for All
Urban Consumers published by the Department of Labor. Such adjustments
shall be made to the nearest dollar based on changes measured over the
most recent twelve-month period for which data are available.
(h) Audit funds. For the expense of conducting audits and reviews
under Sec. 226.8, funds shall be made available to each State agency in
an amount equal to one and one-half percent of the Program reimbursement
provided to institutions within the State during the second fiscal year
preceding the fiscal year for which these funds are to be made
available. In fiscal years 2005-2007, for the expense of conducting
audits and reviews under Sec. 226.8, funds shall be made available to
each State agency in an amount equal to one percent of the Program
reimbursement provided to institutions within the State during the
second fiscal year preceding the fiscal year for which these funds are
to be made available. The amount of assistance provided to a State under
this paragraph in any fiscal year may not exceed the State's
expenditures under Sec. 226.8 during such fiscal year.
(i) Method of funding. FNS shall authorize funds for State agencies
in accordance with the Uniform Federal Assistance Regulations.
(j) Special developmental projects. The State agency may use in
carrying out special developmental projects an amount not to exceed one
percent of Program funds used in the second prior fiscal year. Special
developmental projects shall conform to FNS guidance and be approved in
writing by FNS.
[47 FR 36527, Aug. 20, 1982, as amended at 52 FR 36906, Oct. 2, 1987; 53
FR 52588, Dec. 28, 1988; 62 FR 902, Jan. 7, 1997; 63 FR 9728, Feb. 26,
1998; 69 FR 53536, Sept. 1, 2004]
[[Page 171]]
Sec. 226.5 Donation of commodities.
(a) USDA foods available under section 6 of this Act, section 416 of
the Agricultural Act of 1949 (7 U.S.C. 1431) or purchased under section
32 of the Act of August 24, 1935 (7 U.S.C. 1431), section 709 of the
Food and Agriculture Act of 1965 (7 U.S.C. 1446a-1), or other authority,
and donated by the Department shall be made available to each State.
(b) The value of such commodities donated to each State for each
school year shall be, at a minimum, the amount obtained by multiplying
the number of reimbursable lunches and suppers served in participating
institutions in that State during the preceding school year by the rate
for commodities established under section 6(e) of the Act for the
current school year. Adjustments shall be made at the end of each school
year to reflect the difference between the number of reimbursable
lunches and suppers served during the preceding year and the number
served during the current year, and subsequent commodity entitlement
shall be based on the adjusted meal counts. At the discretion of FNS,
current-year adjustments may be made for significant variations in the
number of reimbursable meals served. Such current-year adjustments will
not be routine and will only be made for unusual problems encountered in
a State, such as a disaster that necessitates institutional closures for
a prolonged period of time. CACFP State agencies electing to receive
cash-in-lieu of commodities will receive payments based on the number of
reimbursable meals actually served during the current school year.
[47 FR 36527, Aug. 20, 1982, as amended at 62 FR 23618, May 1, 1997]
Subpart C_State Agency Provisions
Sec. 226.6 State agency administrative responsibilities.
(a) State agency personnel. Each State agency must provide
sufficient consultative, technical, and managerial personnel to:
(1) Administer the Program;
(2) Provide sufficient training and technical assistance to
institutions;
(3) Monitor Program performance;
(4) Facilitate expansion of the Program in low-income and rural
areas; and
(5) Ensure effective operation of the Program by participating
institutions.
(b) Program applications and agreements. Each State agency must
establish application review procedures, in accordance with paragraphs
(b)(1) through (b)(3) of this section, to determine the eligibility of
new institutions, renewing institutions, and facilities for which
applications are submitted by sponsoring organizations. The State agency
must enter into written agreements with institutions in accordance with
paragraph (b)(4) of this section.
(1) Application procedures for new institutions. Each State agency
must establish application procedures to determine the eligibility of
new institutions under this part. At a minimum, such procedures must
require that institutions submit information to the State agency in
accordance with paragraph (f) of this section. For new private nonprofit
and proprietary child care institutions, such procedures must also
include a pre-approval visit by the State agency to confirm the
information in the institution's application and to further assess its
ability to manage the Program. The State agency must establish factors,
consistent with Sec. 226.16(b)(1), that it will consider in determining
whether a new sponsoring organization has sufficient staff to perform
required monitoring responsibilities at all of its sponsored facilities.
As part of the review of the sponsoring organization's management plan,
the State agency must determine the appropriate level of staffing for
each sponsoring organization, consistent with the staffing range of
monitors set forth at Sec. 226.16(b)(1) and the factors it has
established. The State agency must ensure that each new sponsoring
organization applying for participation after July 29, 2002 meets this
requirement. In addition, the State agency's application review
procedures must ensure that the following information is included in a
new institution's application:
[[Page 172]]
(i) Participant eligibility information. Centers must submit current
information on the number of enrolled participants who are eligible for
free, reduced-price and paid meals;
(ii) Enrollment information. Sponsoring organizations of day care
homes must submit current information on:
(A) The total number of children enrolled in all homes in the
sponsorship;
(B) An assurance that day care home providers' own children whose
meals are claimed for reimbursement in the Program are eligible for free
or reduced-price meals;
(C) The total number of tier I and tier II day care homes that it
sponsors;
(D) The total number of children enrolled in tier I day care homes;
(E) The total number of children enrolled in tier II day care homes;
and
(F) The total number of children in tier II day care homes that have
been identified as eligible for free or reduced-price meals;
(iii) Nondiscrimination statement. Institutions must submit their
nondiscrimination policy statement and a media release, unless the State
agency has issued a Statewide media release on behalf of all
institutions;
(iv) Management plan. Sponsoring organizations must submit a
complete management plan that includes:
(A) Detailed information on the organization's management and
administrative structure;
(B) A list or description of the staff assigned to Program
monitoring, in accordance with the requirements set forth at Sec.
226.16(b)(1);
(C) An administrative budget that includes projected CACFP
administrative earnings and expenses;
(D) The procedures to be used by the organization to administer the
Program in, and disburse payments to, the child care facilities under
its sponsorship; and
(E) For sponsoring organizations of family day care homes, a
description of the system for making tier I day care home
determinations, and a description of the system of notifying tier II day
care homes of their options for reimbursement;
(v) Budget. An institution must submit a budget that the State
agency must review in accordance with Sec. 226.7(g);
(vi) Documentation of licensing/approval. All centers and family day
care homes must document that they meet Program licensing/approval
requirements;
(vii) Documentation of tax-exempt status. All private nonprofit
institutions must document their tax-exempt status;
(viii) Documentation of for-profit center eligibility. Institutions
must document that each for-profit center for which application is made
meets the definition of a For-profit center, as set forth at Sec.
226.2;
(ix) Preference for commodities/cash-in-lieu of commodities.
Institutions must state their preference to receive commodities or cash-
in-lieu of commodities;
(x) Providing benefits to unserved facilities or participants.--(A)
Criteria. The State agency must develop criteria for determining whether
a new sponsoring organization's participation will help ensure the
delivery of benefits to otherwise unserved facilities or participants,
and must disseminate these criteria to new sponsoring organizations when
they request information about applying to the Program; and
(B) Documentation. The new sponsoring organization must submit
documentation that its participation will help ensure the delivery of
benefits to otherwise unserved facilities or participants in accordance
with the State agency's criteria;
(xi) Presence on National disqualified list. If an institution or
one of its principals is on the National disqualified list and submits
an application, the State agency must deny the application. If a
sponsoring organization submits an application on behalf of a facility,
and either the facility or any of its principals is on the National
disqualified list, the State agency must deny the application;
(xii) Ineligibility for other publicly funded programs.--(A)
General. A State agency is prohibited from approving an institution's
application if, during the past seven years, the institution or any of
its principals have been declared ineligible for any other publicly
funded program by reason of violating that
[[Page 173]]
program's requirements. However, this prohibition does not apply if the
institution or the principal has been fully reinstated in, or determined
eligible for, that program, including the payment of any debts owed;
(B) Certification. Institutions must submit:
(1) A statement listing the publicly funded programs in which the
institution and its principals have participated in the past seven
years; and
(2) A certification that, during the past seven years, neither the
institution nor any of its principals have been declared ineligible to
participate in any other publicly funded program by reason of violating
that program's requirements; or
(3) In lieu of the certification, documentation that the institution
or the principal previously declared ineligible was later fully
reinstated in, or determined eligible for, the program, including the
payment of any debts owed; and
(C) Follow-up. If the State agency has reason to believe that the
institution or its principals were determined ineligible to participate
in another publicly funded program by reason of violating that program's
requirements, the State agency must follow up with the entity
administering the publicly funded program to gather sufficient evidence
to determine whether the institution or its principals were, in fact,
determined ineligible;
(xiii) Information on criminal convictions. (A) A State agency is
prohibited from approving an institution's application if the
institution or any of its principals has been convicted of any activity
that occurred during the past seven years and that indicated a lack of
business integrity. A lack of business integrity includes fraud,
antitrust violations, embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property, making false claims, obstruction of justice,
or any other activity indicating a lack of business integrity as defined
by the State agency; and
(B) Institutions must submit a certification that neither the
institution nor any of its principals has been convicted of any activity
that occurred during the past seven years and that indicated a lack of
business integrity. A lack of business integrity includes fraud,
antitrust violations, embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property, making false claims, obstruction of justice,
or any other activity indicating a lack of business integrity as defined
by the State agency;
(xiv) Certification of truth of applications and submission of names
and addresses. Institutions must submit a certification that all
information on the application is true and correct, along with the name,
mailing address, and date of birth of the institution's executive
director and chairman of the board of directors;
(xv) Outside employment policy. Sponsoring organizations must submit
an outside employment policy. The policy must restrict other employment
by employees that interferes with an employee's performance of Program-
related duties and responsibilities, including outside employment that
constitutes a real or apparent conflict of interest. Sponsoring
organizations that are participating on July 29, 2002, must submit an
outside employment policy not later than September 27, 2002. The policy
will be effective unless disapproved by the State agency;
(xvi) Bond. Sponsoring organizations applying for initial
participation on or after June 20, 2000, must submit a bond, if such
bond is required by State law, regulation, or policy. If the State
agency requires a bond for sponsoring organizations pursuant to State
law, regulation, or policy, the State agency must submit a copy of that
requirement and a list of sponsoring organizations posting a bond to the
appropriate FNSRO on an annual basis; and
(xvii) Compliance with performance standards. Each new institution
must submit information sufficient to document that it is financially
viable, is administratively capable of operating the Program in
accordance with this part, and has internal controls in effect to ensure
accountability. To document this, any new institution must demonstrate
in its application that it is capable of operating in conformance with
the following performance standards. The State agency must only approve
[[Page 174]]
the applications of those new institutions that meet these performance
standards, and must deny the applications of those new institutions that
do not meet the standards.
(A) Performance Standard 1--Financial viability and financial
management. The new institution must be financially viable. Program
funds must be expended and accounted for in accordance with the
requirements of this part, FNS Instruction 796-2 (``Financial Management
in the Child and Adult Care Food Program''), and parts 3015, 3016, and
3019 of this title. To demonstrate financial viability, the new
institution must document that it meets the following criteria:
(1) Description of need/recruitment. A new sponsoring organization
must demonstrate in its management plan that its participation will help
ensure the delivery of Program benefits to otherwise unserved facilities
or participants, in accordance with criteria developed by the State
agency pursuant to paragraph (b)(1)(x) of this section. A new sponsoring
organization must demonstrate that it will use appropriate practices for
recruiting facilities, consistent with paragraph (p) of this section and
any State agency requirements;
(2) Fiscal resources and financial history. A new institution must
demonstrate that it has adequate financial resources to operate the
CACFP on a daily basis, has adequate sources of funds to withstand
temporary interruptions in Program payments and/or fiscal claims against
the institution, and can document financial viability (for example,
through audits, financial statements, etc.); and
(3) Budgets. Costs in the institution's budget must be necessary,
reasonable, allowable, and appropriately documented;
(B) Performance Standard 2--Administrative capability. The new
institution must be administratively capable. Appropriate and effective
management practices must be in effect to ensure that the Program
operates in accordance with this part. To demonstrate administrative
capability, the new institution must document that it meets the
following criteria:
(1) Has an adequate number and type of qualified staff to ensure the
operation of the Program in accordance with this part;
(2) If a sponsoring organization, documents in its management plan
that it employs staff sufficient to meet the ratio of monitors to
facilities, taking into account the factors that the State agency will
consider in determining a sponsoring organization's staffing needs, as
set forth in Sec. 226.16(b)(1); and
(3) If a sponsoring organization, has Program policies and
procedures in writing that assign Program responsibilities and duties,
and ensure compliance with civil rights requirements; and
(C) Performance Standard 3--Program accountability. The new
institution must have internal controls and other management systems in
effect to ensure fiscal accountability and to ensure that the Program
will operate in accordance with the requirements of this part. To
demonstrate Program accountability, the new institution must document
that it meets the following criteria:
(1) Board of directors. Has adequate oversight of the Program by its
governing board of directors;
(2) Fiscal accountability. Has a financial system with management
controls specified in writing. For new sponsoring organizations, these
written operational policies must assure:
(i) Fiscal integrity and accountability for all funds and property
received, held, and disbursed;
(ii) The integrity and accountability of all expenses incurred;
(iii) That claims will be processed accurately, and in a timely
manner;
(iv) That funds and property are properly safeguarded and used, and
expenses incurred, for authorized Program purposes; and
(v) That a system of safeguards and controls is in place to prevent
and detect improper financial activities by employees;
(3) Recordkeeping. Maintains appropriate records to document
compliance with Program requirements, including budgets, accounting
records, approved budget amendments, and, if a sponsoring organization,
management plans
[[Page 175]]
and appropriate records on facility operations;
(4) Sponsoring organization operations. If a new sponsoring
organization, documents in its management plan that it will:
(i) Provide adequate and regular training of sponsoring organization
staff and sponsored facilities in accordance with Sec. 226.15(e)(12)
and (e)(14) and Sec. 226.16(d)(2) and (d)(3);
(ii) Perform monitoring in accordance with Sec. 226.16(d)(4), to
ensure that sponsored facilities accountably and appropriately operate
the Program;
(iii) If a sponsor of family day care homes, accurately classify day
care homes as tier I or tier II in accordance with Sec. 226.15(f); and
(iv) Have a system in place to ensure that administrative costs
funded from Program reimbursements do not exceed regulatory limits set
forth at Sec. Sec. 226.12(a) and 226.16(b)(1); and
(5) Meal service and other operational requirements. Independent
centers and facilities will follow practices that result in the
operation of the Program in accordance with the meal service,
recordkeeping, and other operational requirements of this part. These
practices must be documented in the independent center's application or
in the sponsoring organization's management plan and must demonstrate
that independent centers or sponsored facilities will:
(i) Provide meals that meet the meal patterns set forth in Sec.
226.20;
(ii) Comply with licensure or approval requirements set forth in
paragraph (d) of this section;
(iii) Have a food service that complies with applicable State and
local health and sanitation requirements;
(iv) Comply with civil rights requirements;
(v) Maintain complete and appropriate records on file; and
(vi) Claim reimbursement only for eligible meals.
(2) Application procedures for renewing institutions. Each State
agency must establish application procedures to determine the
eligibility of renewing institutions under this part. Renewing
institutions must not be required to submit a free and reduced-price
policy statement or a nondiscrimination statement unless they make
substantive changes to either statement. The State agency must require
each renewing institution participating in the Program to reapply for
participation at a time determined by the State agency, except that no
institution may be allowed to participate for less than 12 or more than
36 calendar months under an existing application, except when the State
agency determines that unusual circumstances warrant reapplication in
less than 12 months. The State agency must establish factors, consistent
with Sec. 226.16(b)(1), that it will consider in determining whether a
renewing sponsoring organization has sufficient staff to perform
required monitoring responsibilities at all of its sponsored facilities.
As part of the review of the renewing sponsoring organization's
management plan, the State agency must determine the appropriate level
of staffing for the sponsoring organization, consistent with the
staffing range of monitors set forth at Sec. 226.16(b)(1) and the
factors it has established. The State agency must ensure that each
currently participating sponsoring organization meets this requirement
no later than July 29, 2003. At a minimum, the application review
procedures established by the State agency must require that renewing
institutions submit information to the State agency in accordance with
paragraph (f) of this section. In addition, the State agency's
application review procedures must ensure that the following information
is included in a renewing institution's application:
(i) Management plan. For renewing sponsoring organizations, a
complete management plan that meets the requirements of paragraphs
(b)(1)(iv), (b)(1)(v), (f)(1)(vi), and (f)(3)(i) of this section and
Sec. 226.7(g);
(ii) Presence on National disqualified list. A renewing institution
is prohibited from submitting a renewal application if it or any of its
principals is currently on the National disqualified list. If such an
institution submits an application, the State agency must deny the
application. A renewing sponsoring organization is also prohibited from
submitting a renewal application on behalf of a facility if the facility
or any of its principals is on the National
[[Page 176]]
disqualified list. If a renewing sponsoring organization submits an
application on behalf of such a facility, the State agency must deny the
facility's application;
(iii) Ineligibility for other publicly funded programs.--(A)
General. A State agency is prohibited from approving a renewing
institution's application if, during the past seven years, the
institution or any of its principals have been declared ineligible for
any other publicly funded program by reason of violating that program's
requirements. However, this prohibition does not apply if the
institution or the principal has been fully reinstated in, or determined
eligible for, that program, including the payment of any debts owed;
(B) Certification. Renewing institutions must submit:
(1) A statement listing the publicly funded programs in which the
institution and its principals have participated in the past seven
years; and
(2) A certification that, during the past seven years, neither the
institution nor any of its principals have been declared ineligible to
participate in any other publicly funded program by reason of violating
that program's requirements; or
(3) In lieu of the certification, documentation that the institution
or the principal previously declared ineligible was later fully
reinstated in, or determined eligible for, the program, including the
payment of any debts owed; and
(C) Follow-up. If the State agency has reason to believe that the
renewing institution or any of its principals were determined ineligible
to participate in another publicly funded program by reason of violating
that program's requirements, the State agency must follow up with the
entity administering the publicly funded program to gather sufficient
evidence to determine whether the institution or its principals were, in
fact, determined ineligible;
(iv) Information on criminal convictions. (A) A State agency is
prohibited from approving a renewing institution's application if the
institution or any of its principals have been convicted of any activity
that occurred during the past seven years and that indicated a lack of
business integrity. A lack of business integrity includes fraud,
antitrust violations, embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property, making false claims, obstruction of justice,
or any other activity indicating a lack of business integrity as defined
by the State agency; and
(B) Renewing institutions must submit a certification that neither
the institution nor any of its principals have been convicted of any
activity that occurred during the past seven years and that indicated a
lack of business integrity. A lack of business integrity includes fraud,
antitrust violations, embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property, making false claims, obstruction of justice,
or any other activity indicating a lack of business integrity as defined
by the State agency;
(v) Certification of truth of applications and submission of names
and addresses. Renewing institutions must submit a certification that
all information on the application is true and correct, along with the
name, mailing address, and date of birth of the institution's executive
director and chairman of the board of directors;
(vi) Outside employment policy. Renewing sponsoring organizations
must submit an outside employment policy. The policy must restrict other
employment by employees that interferes with an employee's performance
of Program-related duties and responsibilities, including outside
employment that constitutes a real or apparent conflict of interest.
Sponsoring organizations that are participating on July 29, 2002, must
submit an outside employment policy not later than September 27, 2002.
The policy will be effective unless disapproved by the State agency;
(vii) Compliance with performance standards. Each renewing
institution must submit information sufficient to document that it is
financially viable, is administratively capable of operating the Program
in accordance with this part, and has internal controls in effect to
ensure accountability. To document this, any renewing institution must
demonstrate in its application
[[Page 177]]
that it is capable of operating in conformance with the following
performance standards. The State agency must only approve the
applications of those renewing institutions that meet these performance
standards, and must deny the applications of those that do not meet the
standards.
(A) Performance Standard 1--Financial viability and financial
management. The renewing institution must be financially viable. Program
funds must be expended and accounted for in accordance with the
requirements of this part, FNS Instruction 796-2 (``Financial Management
in the Child and Adult Care Food Program''), and parts 3015, 3016 and
3019 of this title. To demonstrate financial viability, the renewing
institution must document that it meets the following criteria:
(1) Description of need/recruitment. A renewing sponsoring
organization must demonstrate that it will use appropriate practices for
recruiting facilities, consistent with paragraph (p) of this section and
any State agency requirements;
(2) Fiscal resources and financial history. A renewing institution
must demonstrate that it has adequate financial resources to operate the
CACFP on a daily basis, has adequate sources of funds to withstand
temporary interruptions in Program payments and/or fiscal claims against
the institution, and can document financial viability (for example,
through audits, financial statements, etc.); and
(3) Budgets. Costs in the renewing institution's budget must be
necessary, reasonable, allowable, and appropriately documented;
(B) Performance Standard 2--Administrative capability. The renewing
institution must be administratively capable. Appropriate and effective
management practices must be in effect to ensure that the Program
operates in accordance with this part. To demonstrate administrative
capability, the renewing institution must document that it meets the
following criteria:
(1) Has an adequate number and type of qualified staff to ensure the
operation of the Program in accordance with this part;
(2) If a sponsoring organization, documents in its management plan
that it employs staff sufficient to meet the ratio of monitors to
facilities, taking into account the factors that the State agency will
consider in determining a sponsoring organization's staffing needs, as
set forth in Sec. 226.16(b)(1); and
(3) If a sponsoring organization, has Program policies and
procedures in writing that assign Program responsibilities and duties,
and ensure compliance with civil rights requirements; and
(C) Performance Standard 3--Program accountability. The renewing
institution must have internal controls and other management systems in
effect to ensure fiscal accountability and to ensure that the Program
operates in accordance with the requirements of this part. To
demonstrate Program accountability, the renewing institution must
document that it meets the following criteria:
(1) Board of directors. Has adequate oversight of the Program by its
governing board of directors;
(2) Fiscal accountability. Has a financial system with management
controls specified in writing. For sponsoring organizations, these
written operational policies must assure:
(i) Fiscal integrity and accountability for all funds and property
received, held, and disbursed;
(ii) The integrity and accountability of all expenses incurred;
(iii) That claims are processed accurately, and in a timely manner;
(iv) That funds and property are properly safeguarded and used, and
expenses incurred, for authorized Program purposes; and
(v) That a system of safeguards and controls is in place to prevent
and detect improper financial activities by employees;
(3) Recordkeeping. Maintains appropriate records to document
compliance with Program requirements, including budgets, accounting
records, approved budget amendments, and, if a sponsoring organization,
management plans and appropriate records on facility operations;
(4) Sponsoring organization operations. A renewing sponsoring
organization must document in its management plan that it will:
[[Page 178]]
(i) Provide adequate and regular training of sponsoring organization
staff and sponsored facilities in accordance with Sec. 226.15(e)(12)
and (e)(14) and Sec. 226.16(d)(2) and (d)(3);
(ii) Perform monitoring in accordance with Sec. 226.16(d)(4), to
ensure that sponsored facilities accountably and appropriately operate
the Program;
(iii) If a sponsor of family day care homes, accurately classify day
care homes as tier I or tier II in accordance with Sec. 226.15(f); and
(iv) Have a system in place to ensure that administrative costs
funded from Program reimbursements do not exceed regulatory limits set
forth at Sec. Sec. 226.12(a) and 226.16(b)(1); and
(5) Meal service and other operational requirements. All independent
centers and facilities must follow practices that result in the
operation of the Program in accordance with the meal service,
recordkeeping, and other operational requirements of this part. These
practices must be documented in the independent center's application or
in the sponsoring organization's management plan and must demonstrate
that independent centers or sponsored facilities:
(i) Provide meals that meet the meal patterns set forth in Sec.
226.20;
(ii) Comply with licensure or approval requirements set forth in
paragraph (d) of this section;
(iii) Have a food service that complies with applicable State and
local health and sanitation requirements;
(iv) Comply with civil rights requirements;
(v) Maintain complete and appropriate records on file; and
(vi) Claim reimbursement only for eligible meals.
(3) State agency notification requirements. Any new or renewing
institution applying for participation in the Program must be notified
in writing of approval or disapproval by the State agency, within 30
calendar days of the State agency's receipt of a complete application.
Whenever possible, State agencies should provide assistance to
institutions that have submitted an incomplete application. Any
disapproved applicant institution or family day care home must be
notified of the reasons for its disapproval and its right to appeal
under paragraph (k) or (l), respectively, of this section.
(4) Program agreements. (i) The State agency must require each
institution that has been approved for participation in the Program to
enter into an agreement governing the rights and responsibilities of
each party. The State agency may allow a renewing institution to amend
its existing Program agreement in lieu of executing a new agreement. The
existence of a valid agreement, however, does not eliminate the need for
an institution to comply with the reapplication and related provisions
at paragraphs (b) and (f) of this section.
(ii) State agencies may elect to enter into permanent agreements
with institutions. However, if they elect not to enter into permanent
agreements with institutions, the length of time during which such
agreements are in effect must be no less than one and no more than three
years, except that:
(A) The State agency and an institution that is a school food
authority must enter into a single permanent agreement for all child
nutrition programs administered by the school food authority and the
State agency;
(B) If a State agency denies the application of a renewing
institution, it must temporarily extend its agreement with that
institution in accordance with paragraph (c)(2)(iii)(D) of this section;
(C) If the State agency determines that unusual circumstances
warrant reapplication in less than 12 months, the State agency may
approve the agreement with the institution for a period of less than one
year.
(iii) Any agreement that extends from one fiscal year into the
following fiscal year must stipulate that, in subsequent years, the
agreement is in effect contingent upon the availability of Program
funds. However, this does not limit the State agency's ability to
terminate the agreement in accordance with paragraph (c) of this
section.
(iv) The Program agreement must provide that the institution accepts
final financial and administrative responsibility for management of a
proper, efficient, and effective food service, and will comply with all
requirements
[[Page 179]]
under this part. In addition, the agreement must state that the sponsor
must comply with all requirements of title VI of the Civil Rights Act of
1964, title IX of the Education Amendments of 1972, section 504 of the
Rehabilitation Act of 1973, the Age Discrimination Act of 1975 and the
Department's regulations concerning nondiscrimination (parts 15, 15a and
15b of this title), including requirements for racial and ethnic
participation data collection, public notification of the
nondiscrimination policy, and reviews to assure compliance with such
policy, to the end that no person may, on the grounds of race, color,
national origin, sex, age, or disability, be excluded from participation
in, be denied the benefits of, or be otherwise subjected to
discrimination under, the Program.
(v) The Program agreement must also notify the institution of the
right of the State agency, the Department, and other State or Federal
officials to make announced or unannounced reviews of their operations
during the institution's normal hours of child or adult care operations,
and that anyone making such reviews must show photo identification that
demonstrates that they are employees of one of these entities.
(c) Denial of applications and termination of agreements--(1) Denial
of a new institution's application--(i) General. If a new institution's
application does not meet all of the requirements in paragraph (b) of
this section and in Sec. Sec. 226.15(b) and 226.16(b), the State agency
must deny the application. If, in reviewing a new institution's
application, the State agency determines that the institution has
committed one or more serious deficiency listed in paragraph (c)(1)(ii)
of this section, the State agency must initiate action to:
(A) Deny the new institution's application; and
(B) Disqualify the new institution and the responsible principals
and responsible individuals (e.g., the person who signs the
application).
(ii) List of serious deficiencies for new institutions. The list of
serious deficiencies is not identical for each category of institution
(new, renewing, participating) because the type of information likely to
be available to the State agency is different, depending on whether the
State agency is reviewing a new or renewing institution's application or
is conducting a review of a participating institution. Serious
deficiencies for new institutions are:
(A) Submission of false information on the institution's
application, including but not limited to a determination that the
institution has concealed a conviction for any activity that occurred
during the past seven years and that indicates a lack of business
integrity. A lack of business integrity includes fraud, antitrust
violations, embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements, receiving stolen
property, making false claims, obstruction of justice, or any other
activity indicating a lack of business integrity as defined by the State
agency; or
(B) Any other action affecting the institution's ability to
administer the Program in accordance with Program requirements.
(iii) Serious deficiency notification procedures for new
institutions. If the State agency determines that a new institution has
committed one or more serious deficiency listed in paragraph (c)(1)(ii)
of this section, the State agency must use the following procedures to
provide the institution and the responsible principals and responsible
individuals with notice of the serious deficiency(ies) and an
opportunity to take corrective action.
(A) Notice of serious deficiency. The State agency must notify the
institution's executive director and chairman of the board of directors
that the institution has been determined to be seriously deficient. The
notice must identify the responsible principals and responsible
individuals (e.g., for new institutions, the person who signed the
application) and must be sent to those persons as well. The State agency
may specify in the notice different corrective action, and time periods
for completing the corrective action, for the institution and the
responsible principals and responsible individuals. At the same time the
notice is issued, the State agency must add the institution to the State
agency list, along with the
[[Page 180]]
basis for the serious deficiency determination, and provide a copy of
the notice to the appropriate FNSRO. The notice must also specify:
(1) The serious deficiency(ies);
(2) The actions to be taken to correct the serious deficiency(ies);
(3) The time allotted to correct the serious deficiency(ies) in
accordance with paragraph (c)(4) of this section.
(4) That the serious deficiency determination is not subject to
administrative review;
(5) That failure to fully and permanently correct the serious
deficiency(ies) within the allotted time will result in denial of the
institution's application and the disqualification of the institution
and the responsible principals and responsible individuals; and
(6) That the State agency will not pay any claims for reimbursement
for eligible meals served or allowable administrative expenses incurred
until the State agency has approved the institution's application and
the institution has signed a Program agreement.
(B) Successful corrective action.
(1) If corrective action has been taken to fully and permanently
correct the serious deficiency(ies) within the allotted time and to the
State agency's satisfaction, the State agency must:
(i) notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals, that the State agency has rescinded its serious deficiency
determination; and
(ii) offer the new institution the opportunity to resubmit its
application. If the new institution resubmits its application, the State
agency must complete its review of the application within 30 days after
receiving a complete and correct application.
(2) If corrective action is complete for the institution but not for
all of the responsible principals and responsible individuals (or vice
versa), the State agency must:
(i) continue with the actions (as set forth in paragraph
(c)(1)(iii)(C) of this section) against the remaining parties;
(ii) at the same time the notice is issued, the State agency must
also update the State agency list to indicate that the serious
deficiency(ies) has(ve) been corrected and provide a copy of the notice
to the appropriate FNSRO; and
(iii) if the new institution has corrected the serious
deficiency(ies), offer it the opportunity to resubmit its application.
If the new institution resubmits its application, the State agency must
complete its review of the application within 30 days after receiving a
complete and correct application.
(C) Application denial and proposed disqualification. If timely
corrective action is not taken to fully and permanently correct the
serious deficiency(ies), the State agency must notify the institution's
executive director and chairman of the board of directors, and the
responsible principals and responsible individuals, that the
institution's application has been denied. At the same time the notice
is issued, the State agency must also update the State agency list and
provide a copy of the notice to the appropriate FNSRO. The notice must
also specify:
(1) That the institution's application has been denied and the State
agency is proposing to disqualify the institution and the responsible
principals and responsible individuals;
(2) The basis for the actions; and
(3) The procedures for seeking an administrative review (in
accordance with paragraph (k) of this section) of the application denial
and proposed disqualifications.
(D) Program payments. The State agency is prohibited from paying any
claims for reimbursement from a new institution for eligible meals
served or allowable administrative expenses incurred until the State
agency has approved its application and the institution and State agency
have signed a Program agreement.
(E) Disqualification. When the time for requesting an administrative
review expires or when the administrative review official upholds the
State agency's denial and proposed disqualifications, the State agency
must notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals that the institution and the responsible principal and
responsible individuals have been disqualified. At the same time the
notice
[[Page 181]]
is issued, the State agency must also update the State agency list and
provide a copy of the notice and the mailing address and date of birth
for each responsible principal and responsible individual to the
appropriate FNSRO.
(2) Denial of a renewing institution's application.--(i) General. If
a renewing institution's application does not meet all of the
requirements in paragraph (b) of this section and in Sec. Sec.
226.15(b) and 226.16(b), the State agency must deny the application. If,
in reviewing a renewing institution's application, the State agency
determines that the institution has committed one or more serious
deficiency listed in paragraph (c)(2)(ii) of this section, the State
agency must initiate action to deny the renewing institution's
application and initiate action to disqualify the renewing institution
and the responsible principals and responsible individuals.
(ii) List of serious deficiencies for renewing institutions. The
list of serious deficiencies is not identical for each category of
institution (new, renewing, participating) because the type of
information likely to be available to the State agency is different,
depending on whether the State agency is reviewing a new or renewing
institution's application or is conducting a review of a participating
institution. Serious deficiencies for renewing institutions are:
(A) Submission of false information on the institution's
application, including but not limited to a determination that the
institution has concealed a conviction for any activity that occurred
during the past seven years and that indicates a lack of business
integrity. A lack of business integrity includes fraud, antitrust
violations, embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements, receiving stolen
property, making false claims, obstruction of justice, or any other
activity indicating a lack of business integrity as defined by the State
agency;
(B) Failure to operate the Program in conformance with the
performance standards set forth in paragraphs (b)(1)(xvii) and
(b)(2)(vii) of this section;
(C) Failure to comply with the bid procedures and contract
requirements of applicable Federal procurement regulations;
(D) Use of a food service management company that is in violation of
health codes;
(E) Failure by a sponsoring organization of day care homes to
properly classify day care homes as tier I or tier II in accordance with
Sec. 226.15(f);
(F) Failure by a sponsoring organization to properly train or
monitor sponsored facilities in accordance with Sec. 226.16(d);
(G) Failure to perform any of the other financial and administrative
responsibilities required by this part;
(H) Failure to properly implement and administer the day care home
termination and administrative review provisions set forth at paragraph
(l) of this section and Sec. 226.16(l); or
(I) any other action affecting the institution's ability to
administer the Program in accordance with Program requirements.
(iii) Serious deficiency notification procedures for renewing
institutions. If the State agency determines that a renewing institution
has committed one or more serious deficiency listed in paragraph
(c)(2)(ii) of this section, the State agency must use the following
procedures to provide the institution and the responsible principals and
responsible individuals notice of the serious deficiency(ies) and an
opportunity to take corrective action.
(A) Notice of serious deficiency. The State agency must notify the
institution's executive director and chairman of the board of directors
that the institution has been determined to be seriously deficient. The
notice must identify the responsible principals and responsible
individuals and must be sent to those persons as well. The State agency
may specify in the notice different corrective action, and time periods
for completing the corrective action, for the institution and the
responsible principals and responsible individuals. At the same time the
notice is issued, the State agency must add the institution to the State
agency list, along with the basis for the serious deficiency
determination, and provide a copy of the notice to the appropriate
FNSRO. The notice must also specify:
[[Page 182]]
(1) The serious deficiency(ies);
(2) The actions to be taken to correct the serious deficiency(ies);
(3) The time allotted to correct the serious deficiency(ies) in
accordance with paragraph (c)(4) of this section;
(4) That the serious deficiency determination is not subject to
administrative review.
(5) That failure to fully and permanently correct the serious
deficiency(ies) within the allotted time will result in the State
agency's denial of the institution's application, the proposed
termination of the institution's agreement (if the State agency has
temporarily extended the agreement pursuant to paragraph (c)(2)(iii)(D)
of this section) and the proposed disqualification of the institution
and the responsible principals and responsible individuals; and
(6) That the institution's voluntary termination of its agreement
with the State agency after having been notified that it is seriously
deficient will still result in the instituion's formal termination by
the State agency and placement of the institution and its responsible
principals and responsible individuals on the National disqualified
list.
(B) Successful corrective action. (1) If corrective action has been
taken to fully and permanently correct the serious deficiency(ies)
within the allotted time and to the State agency's satisfaction, the
State agency must:
(i) Notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals, that the State agency has rescinded its serious deficiency
determination; and
(ii) Offer the renewing institution the opportunity to resubmit its
application. If the renewing institution resubmits its application, the
State agency must complete its review of the application within 30 days
after receiving a complete and correct application.
(2) If corrective action is complete for the institution but not for
all of the responsible principals and responsible individuals (or vice
versa), the State agency must:
(i) continue with the actions (as set forth in paragraph
(c)(2)(iii)(C) of this section) against the remaining parties;
(ii) at the same time the notice is issued, the State agency must
also update the State agency list to indicate that the serious
deficiency(ies) has(ve) been corrected and provide a copy of the notice
to the appropriate FNSRO; and
(iii) if the renewing institution has corrected the serious
deficiency(ies), offer it the opportunity to resubmit its application.
If the renewing institution resubmits its application, the State agency
must complete its review of the application within 30 days after
receiving a complete and correct application.
(C) Application denial and proposed disqualification. If timely
corrective action is not taken to fully and permanently correct the
serious deficiency(ies), the State agency must notify the institution's
executive director and chairman of the board of directors, and the
responsible principals and responsible individuals, that the
institution's application has been denied. At the same time the notice
is issued, the State agency must update the State agency list and
provide a copy of the notice to the appropriate FNSRO. The notice must
also specify:
(1) That the institution's application has been denied and the State
agency is proposing to terminate the institution's temporarily-extended
agreement and to disqualify the institution and the responsible
principals and responsible individuals;
(2) The basis for the actions;
(3) That, if the institution voluntarily terminates its agreement
after receiving the notice of the proposed termination, the institution
and the responsible principals and responsible individuals will be
disqualified;
(4) The procedures for seeking an administrative review (in
accordance with paragraph (k) of this section) of the application denial
and proposed disqualifications; and
(5) That the institution may continue to participate in the Program
and receive Program reimbursement for eligible meals served and
allowable administrative costs incurred until its administrative review
is completed.
(D) Program payments and extended agreement. If the renewing
institution's agreement expires before the end of the time allotted for
corrective action,
[[Page 183]]
and/or the conclusion of any administrative review requested by the
renewing institution:
(1) The State agency must temporarily extend its current agreement
with the renewing institution and continue to pay any valid unpaid
claims for reimbursement for eligible meals served and allowable
administrative expenses incurred; and
(2) The actions set forth in paragraph (c)(2)(iii)(D)91) of this
section must be taken either until the serious deficiency(ies) is
corrected or until the institution's agreement is terminated, including
the period of any administrative review;
(E) Agreement termination and disqualification. When the time for
requesting an administrative review expires or when the administrative
review official upholds the State agency's denial of the institution's
application, the proposed termination, and the proposed
disqualifications, the State agency must:
(1) Notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals, that the temporarily-extended agreement has been terminated
and that the institution and the responsible principals and responsible
individuals have been disqualified;
(2) Update the State agency list at the time such notice is issued;
and
(3) Provide a copy of the notice and the mailing address and date of
birth for each responsible principal and responsible individual to the
appropriate FNSRO.
(3) Termination of a participating institution's agreement. (i)
General. If the State agency holds an agreement with an institution
operating in more than one State that has been disqualified from the
Program by another State agency and placed on the National disqualified
list, the State agency must terminate the institution's agreement
effective no later than 45 days of the date of the institution's
disqualification by the other State agency. At the same time the notice
of termination is issued, the State agency must add the institution to
the State agency list and indicate that the institution's agreement has
been terminated and provide a copy of the notice to the appropriate
FNSRO. If the State agency determines that a participating institution
has committed one or more serious deficiency listed in paragraph
(c)(3)(ii) of this section, the State agency must initiate action to
terminate the agreement of a participating institution and initiate
action to disqualify the institution and any responsible principals and
responsible individuals.
(ii) List of serious deficiencies for participating institutions.
The list of serious deficiencies is not identical for each category of
institution (new, renewing, participating) because the type of
information likely to be available to the State agency is different,
depending on whether the State agency is reviewing a new or renewing
institution's application or is conducting a review of a participating
institution. Serious deficiencies for participating institutions are:
(A) Submission of false information on the institution's
application, including but not limited to a determination that the
institution has concealed a conviction for any activity that occurred
during the past seven years and that indicates a lack of business
integrity. A lack of business integrity includes fraud, antitrust
violations, embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements, receiving stolen
property, making false claims, obstruction of justice, or any other
activity indicating a lack of business integrity as defined by the State
agency;
(B) Permitting an individual who is on the National disqualified
list to serve in a principal capacity with the institution or, if a
sponsoring organization, permitting such an individual to serve as a
principal in a sponsored center or as a day care home;
(C) Failure to operate the Program in conformance with the
performance standards set forth in paragraphs (b)(1)(xvii) and
(b)(2)(vii) of this section;
(D) Failure to comply with the bid procedures and contract
requirements of applicable Federal procurement regulations;
(E) Failure to return to the State agency any advance payments that
exceeded the amount earned for serving
[[Page 184]]
eligible meals, or failure to return disallowed start-up or expansion
payments;
(F) Failure to maintain adequate records;
(G) Failure to adjust meal orders to conform to variations in the
number of participants;
(H) Claiming reimbursement for meals not served to participants;
(I) Claiming reimbursement for a significant number of meals that do
not meet Program requirements;
(J) Use of a food service management company that is in violation of
health codes;
(K) Failure of a sponsoring organization to disburse payments to its
facilities in accordance with the regulations at Sec. 226.16(g) and (h)
or in accordance with its management plan;
(L) Claiming reimbursement for meals served by a for-profit child
care center or a for-profit outside-school-hours care center during a
calendar month in which less than 25 percent of the children in care
(enrolled or licensed capacity, whichever is less) were eligible for
free or reduced-price meals or were title XX beneficiaries;
(M) Claiming reimbursement for meals served by a for-profit adult
day care center during a calendar month in which less than 25 percent of
its enrolled adult participants were title XIX or title XX
beneficiaries;
(N) Failure by a sponsoring organization of day care homes to
properly classify day care homes as tier I or tier II in accordance with
Sec. 226.15(f);
(O) Failure by a sponsoring organization to properly train or
monitor sponsored facilities in accordance with Sec. 226.16(d);
(P) Use of day care home funds by a sponsoring organization to pay
for the sponsoring organization's administrative expenses;
(Q) Failure to perform any of the other financial and administrative
responsibilities required by this part;
(R) Failure to properly implement and administer the day care home
termination and administrative review provisions set forth at paragraph
(l) of this section and Sec. 226.16(l);
(S) The fact the institution or any of the institution's principals
have been declared ineligible for any other publicly funded program by
reason of violating that program's requirements. However, this
prohibition does not apply if the institution or the principal has been
fully reinstated in, or is now eligible to participate in, that program,
including the payment of any debts owed;
(T) Conviction of the institution or any of its principals for any
activity that occurred during the past seven years and that indicates a
lack of business integrity. A lack of business integrity includes fraud,
antitrust violations, embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property, making false claims, obstruction of justice,
or any other activity indicating a lack of business integrity as defined
by the State agency; or
(U) Any other action affecting the institution's ability to
administer the Program in accordance with Program requirements.
(iii) Serious deficiency notification procedures for participating
institutions. If the State agency determines that a participating
institution has committed one or more serious deficiency listed in
paragraph (c)(3)(ii) of this section, the State agency must use the
following procedures to provide the institution and the responsible
principals and responsible individuals notice of the serious
deficiency(ies) and an opportunity to take corrective action. However,
if the serious deficiency(ies) constitutes an imminent threat to the
health or safety of participants, or the institution has engaged in
activities that threaten the public health or safety, the State agency
must follow the procedures in paragraph (c)(5)(i) of this section
instead of the procedures below. Further, if the serious deficiency is
the submission of a false or fraudulent claim, in addition to the
procedures below, the State agency may suspend the institution's
participation in accordance with paragraph (c)(5)(ii) of this section.
(A) Notice of serious deficiency. The State agency must notify the
institution's executive director and chairman of the board of directors
that the institution has been determined seriously deficient. The notice
must identify the
[[Page 185]]
responsible principals and responsible individuals and must be sent to
those persons as well. The State agency may specify in the notice
different corrective action and time periods for completing the
corrective action for the institution and the responsible principals and
responsible individuals. At the same time the notice is issued, the
State agency must add the institution to the State agency list, along
with the basis for the serious deficiency determination, and provide a
copy of the notice to the appropriate FNSRO. The notice must also
specify:
(1) The serious deficiency(ies);
(2) The actions to be taken to correct the serious deficiency(ies);
(3) The time allotted to correct the serious deficiency(ies) in
accordance with paragraph (c)(4) of this section;
(4) That the serious deficiency determination is not subject to
administrative review.
(5) That failure to fully and permanently correct the serious
deficiency(ies) within the allotted time will result in the State
agency's proposed termination of the institution's agreement and the
proposed disqualification of the institution and the responsible
principals and responsible individuals; and
(6) That the institution's voluntary termination of its agreement
with the State agency after having been notified that it is seriously
deficient will still result in the instituion's formal termination by
the State agency and placement of the institution and its responsible
principals and responsible individuals on the National disqualified
list.
(B) Successful corrective action. (1) If corrective action has been
taken to fully and permanently correct the serious deficiency(ies)
within the allotted time and to the State agency's satisfaction, the
State agency must:
(i) Notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals, that the State agency has rescinded its serious deficiency
determination; and
(ii) Offer the renewing institution the opportunity to resubmit its
application. If the renewing institution resubmits its application, the
State agency must complete its review of the application within 30 days
after receiving a complete and correct application.
(2) If corrective action is complete for the institution but not for
all of the responsible principals and responsible individuals (or vice
versa), the State agency must:
(i) Continue with the actions (as set forth in paragraph
(c)(3)(iii)(C) of this section) against the remaining parties;
(ii) At the same time the notice is issued, the State agency must
also update the State agency list to indicate that the serious
deficiency(ies) has(ve) been corrected and provide a copy of the notice
to the appropriate FNSRO; and
(iii) If the renewing institution has corrected the serious
deficiency(ies), offer it the opportunity to resubmit its application.
If the renewing institution resubmits its application, the State agency
must complete its review of the application within 30 days after
receiving a complete and correct application.
(C) Proposed termination and proposed disqualification. If timely
corrective action is not taken to fully and permanently correct the
serious deficiency(ies), the State agency must notify the institution's
executive director and chairman of the board of directors, and the
responsible principals and responsible individuals, that the State
agency is proposing to terminate the institution's agreement and to
disqualify the institution and the responsible principals and
responsible individuals. At the same time the notice is issued, the
State agency must also update the State agency list and provide a copy
of the notice to the appropriate FNSRO. The notice must also specify:
(1) That the State agency is proposing to terminate the
institution's agreement and to disqualify the institution and the
responsible principals and responsible individuals;
(2) The basis for the actions;
(3) That, if the institution voluntarily terminates its agreement
after receiving the notice of proposed termination, the institution and
the responsible principals and responsible individuals will be
disqualified.
(4) The procedures for seeking an administrative review (in
accordance with paragraph (k) of this section) of
[[Page 186]]
the application denial and proposed disqualifications; and
(5) That, unless participation has been suspended, the institution
may continue to participate and receive Program reimbursement for
eligible meals served and allowable administrative costs incurred until
its administrative review is completed.
(D) Program payments. Unless participation has been suspended, the
State agency must continue to pay any valid unpaid claims for
reimbursement for eligible meals served and allowable administrative
expenses incurred until the serious deficiency(ies) is corrected or the
institution's agreement is terminated, including the period of any
administrative review.
(E) Agreement termination and disqualification. When the time for
requesting an administrative review expires or when the administrative
review official upholds the State agency's proposed termination and
disqualifications, the State agency must:
(1) Notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals, that the institution's agreement has been terminated and
that the institution and the responsible principals and responsible
individuals have been disqualified;
(2) Update the State agency list at the time such notice is issued;
and
(3) Provide a copy of the notice and the mailing address and date of
birth for each responsible principal and responsible individual to the
appropriate FNSRO.
(4) Corrective action timeframes--(i) General. Except as noted in
this paragraph (c)(4), the State agency is prohibited from allowing more
than 90 days for corrective action from the date the institution
receives the serious deficiency notice.
(ii) Unlawful practices. If the State agency determines that the
institution has engaged in unlawful practices, submitted false or
fraudulent claims or other information to the State agency, or been
convicted of or concealed a criminal background, the State agency is
prohibited from allowing more than 30 days for corrective action.
(iii) Long-term changes. For serious deficiencies requiring the
long-term revision of management systems or processes, the State agency
may permit more than 90 days to complete the corrective action as long
as a corrective action plan is submitted to and approved by the State
agency within 90 days (or such shorter deadline as the State agency may
establish). The corrective action must include milestones and a definite
completion date that the State agency will monitor. The determination of
serious deficiency will remain in effect until the State agency
determines that the serious deficiency(ies) has(ve) been fully and
permanently corrected within the allotted time.
(5) Suspension of an institution's participation. A State agency is
prohibited from suspending an institution's participation (including all
Program payments) except for the reasons set forth in this paragraph
(c)(5).
(i) Public health or safety--(A) General. If State or local health
or licensing officials have cited an institution for serious health or
safety violations, the State agency must immediately suspend the
institution's Program participation, initiate action to terminate the
institution's agreement, and initiate action to disqualify the
institution and the responsible principals and responsible individuals
prior to any formal action to revoke the institution's licensure or
approval. If the State agency determines that there is an imminent
threat to the health or safety of participants at an institution, or
that the institution has engaged in activities that threaten the public
health or safety, the State agency must immediately notify the
appropriate State or local licensing and health authorities and take
action that is consistent with the recommendations and requirements of
those authorities. An imminent threat to the health or safety of
participants and engaging in activities that threaten the public health
or safety constitute serious deficiencies; however, the State agency
must use the procedures in this paragraph (c)(5)(i) (instead of the
procedures in paragraph (c)(3) of this section) to provide the
institution notice of the suspension of
[[Page 187]]
participation, serious deficiency, proposed termination of the
institution's agreement, and proposed disqualification of the
responsible principals and responsible individuals.
(B) Notice of suspension, serious deficiency, proposed termination,
and proposed disqualification. The State agency must notify the
institution's executive director and chairman of the board of directors
that the institution's participation (including Program payments) has
been suspended, that the institution has been determined to be seriously
deficient, and that the State agency proposes to terminate the
institution's agreement and to disqualify the institution and the
responsible principals and responsible individuals. The notice must also
identify the responsible principals and responsible individuals and must
be sent to those persons as well. At the same time this notice is sent,
the State agency must add the institution and the responsible principals
and responsible individuals to the State agency list, along with the
basis for the serious deficiency determination and provide a copy of the
notice to the appropriate FNSRO. The notice must also specify:
(1) That the State agency is suspending the institution's
participation (including Program payments), proposing to terminate the
institution's agreement, and proposing to disqualify the institution and
the responsible principals and responsible individuals;
(2) The serious deficiency(ies);
(3) That, if the institution voluntary terminates its agreement with
the State agency after having been notified of the proposed termination,
the institution and the responsible principals and responsible
individuals will be disqualified;
(4) That the serious deficiency determination is not subject to
administrative review;
(5) The procedures for seeking an administrative review (consistent
with paragraph (k) of this section) of the suspension, proposed
termination, and proposed disqualifications; and
(6) That, if the administrative review official overturns the
suspension, the institution may claim reimbursement for eligible meals
served and allowable administrative costs incurred during the suspension
period.
(C) Agreement termination and disqualification. When the time for
requesting an administrative review expires or when the administrative
review official upholds the State agency's proposed termination and
disqualifications, the State agency must:
(1) Notify the institution's executive director and chairman of the
board of directors, and the responsible principals and responsible
individuals, that the institution's agreement has been terminated and
that the institution and the responsible principals and responsible
individuals have been disqualified;
(2) update the State agency list at the time such notice is issued;
and
(3) provide a copy of the notice and the mailing address and date of
birth for each responsible principal and responsible individual to the
appropriate FNSRO.
(D) Program payments. The State agency is prohibited from paying any
claims for reimbursement from a suspended institution. However, if the
suspended institution prevails in the administrative review of the
proposed termination, the State agency must pay any claims for
reimbursement for eligible meals served and allowable administrative
costs incurred during the suspension period.
(ii) False or fraudulent claims--(A) General. If the State agency
determines that an institution has knowingly submitted a false or
fraudulent claim, the State agency may initiate action to suspend the
institution's participation and must initiate action to terminate the
institution's agreement and initiate action to disqualify the
institution and the responsible principals and responsible individuals
(in accordance with paragraph (c)(3) of this section). The submission of
a false or fraudulent claim constitutes a serious deficiency as set
forth in paragraph (c)(3)(ii) of this section, which lists serious
deficiencies for participating institutions. If the State agency wishes
to suspend the institution's participation, it must use the following
procedures to issue the notice of proposed suspension of participation
at the same time it issues the serious deficiency notice, which
[[Page 188]]
must include the information described in paragraph (c)(3)(iii)(A) of
this section.
(B) Proposed suspension of participation. If the State agency
decides to propose to suspend an institution's participation due to the
institution's submission of a false or fraudulent claim, it must notify
the institution's executive director and chairman of the board of
directors that the State agency intends to suspend the institution's
participation (including all Program payments) unless the institution
requests a review of the proposed suspension. At the same time the
notice is issued, the State agency must also update the State agency
list and provide a copy of the notice to the appropriate FNSRO. The
notice must identify the responsible principals and responsible
individuals and must be sent to those persons as well. The notice must
also specify:
(1) That the State agency is proposing to suspend the institution's
participation;
(2) That the proposed suspension is based on the institution's
submission of a false or fraudulent claim, as described in the serious
deficiency notice;
(3) The effective date of the suspension (which may be no earlier
than 10 days after the institution receives the suspension notice);
(4) The name, address and telephone number of the suspension review
official who will conduct the suspension review; and
(5) That if the institution wishes to have a suspension review, it
must request a review and submit to the suspension review official
written documentation opposing the proposed suspension within 10 days of
the institution's receipt of the notice.
(C) Suspension review. If the institution requests a review of the
State agency's proposed suspension of participation, the suspension
review must be heard by a suspension review official who must:
(1) Be an independent and impartial person other than, and not
accountable to, any person involved in the decision to initiate
suspension proceedings;
(2) Immediately notify the State agency that the institution has
contested the proposed suspension and must obtain from the State agency
its notice of proposed suspension of participation, along with all
supporting documentation; and
(3) Render a decision on suspension of participation within 10 days
of the deadline for receiving the institution's documentation opposing
the proposed suspension.
(D) Suspension review decision. If the suspension review official
determines that the State agency's proposed suspension is not
appropriate, the State agency is prohibited from suspending
participation. If the suspension review official determines, based on a
preponderance of the evidence, that the State agency's action was
appropriate, the State agency must suspend the institution's
participation (including all Program payments), effective on the date of
the suspension review decision. The State agency must notify the
institution's executive director and chairman of the board of directors,
and the responsible principals and responsible individuals, that the
institution's participation has been suspended. At the same time the
notice is issued, the State agency must also update the State agency
list and provide a copy of the notice to the appropriate FNSRO. The
notice must also specify:
(1) That the State agency is suspending the institution's
participation (including Program payments);
(2) The effective date of the suspension (the date of the suspension
review decision);
(3) The procedures for seeking an administrative review (in
accordance with paragraph (k) of this section) of the suspension; and
(4) That if the administrative review official overturns the
suspension, the institution may claim reimbursement for eligible meals
served and allowable administrative costs incurred during the suspension
period.
(E) Program payments. A State agency is prohibited from paying any
claims for reimbursement submitted by a suspended institution. However,
if the institution suspended for the submission of false or fraudulent
claims is a sponsoring organization, the State agency must ensure that
sponsored facilities continue to receive reimbursement for
[[Page 189]]
eligible meals served during the suspension period. If the suspended
institution prevails in the administrative review of the proposed
termination, the State agency must pay any valid unpaid claims for
reimbursement for eligible meals served and allowable administrative
costs incurred during the suspension period.
(F) Maximum time for suspension. Under no circumstances may the
suspension of participation remain in effect for more than 120 days
following the suspension review decision.
(6) FNS determination of serious deficiency. (i) General. FNS may
determine independently that a participating institution has committed
one or more serious deficiency listed in paragraph (c)(3)(ii) of this
section, which lists serious deficiencies for participating
institutions.
(ii) Serious deficiency notification procedures. If FNS determines
that an institution has committed one or more serious deficiency listed
in paragraph (c)(3)(ii) of this section (the list of serious
deficiencies for participating institutions), FNS will use the following
procedures to provide the institution and the responsible principals and
responsible individuals with notice of the serious deficiency(ies) and
an opportunity to take corrective action.
(A) Notice of serious deficiency. FNS will notify the institution's
executive director and chairman of the board of directors that the
institution has been found to be seriously deficient. The notice will
identify the responsible principals and responsible individuals and will
be sent to them as well. FNS may specify in the notice different
corrective action and time periods for completing the corrective action,
for the institution and the responsible principals and responsible
individuals. The notice will also specify:
(1) The serious deficiency(ies);
(2) The actions to be taken to correct the serious deficiency(ies);
(3) The time allotted to correct the serious deficiency(ies) in
accordance with paragraph (c)(4) of this section;
(4) That failure to fully and permanently correct the serious
deficiency(ies) within the allotted time, or the institution's voluntary
termination of its agreement(s) with any State agency after having been
notified that it is seriously deficient, will result in the proposed
disqualification of the institution and the responsible principals and
responsible individuals and the termination of its agreement(s) with all
State agencies; and
(5) That the serious deficiency determination is not subject to
administrative review.
(B) Suspension of participation. If FNS determines that there is an
imminent threat to the health or safety of participants at an
institution, or that the institution has engaged in activities that
threaten the public health or safety, any State agency that holds an
agreement with the institution must suspend the participation of the
institution. If FNS determines that the institution has submitted a
false or fraudulent claim, it may require any State agency that holds an
agreement with the institution to initiate action to suspend the
institution's participation for false or fraudulent claims in accordance
with paragraph (c)(5)(ii) of this section (which deals with an
institution's suspension by a State agency for submission of false or
fraudulent claims). In both cases, FNS will provide the State agency the
information necessary to support these actions and, in the case of a
false and fraudulent claim, will provide an individual to serve as the
suspension review official if requested by the State agency.
(C) Successful corrective action. (1) If corrective action has been
taken to fully and permanently correct the serious deficiency(ies)
within the allotted time and to FNS's satisfaction, FNS will notify the
institution's executive director and chairman of the board of directors,
and the responsible principals and responsible individuals, that it has
rescinded its serious deficiency determination; and
(2) If corrective action is complete for the institution but not for
all of the responsible principals and responsible individuals (or vice
versa), FNS will continue with the actions (as set forth in paragraph
(c)(6)(ii)(D) of this section) against the remaining parties.
(D) Proposed disqualification. If timely corrective action is not
taken to fully and permanently correct the serious
[[Page 190]]
deficiency(ies), FNS will notify the institution's executive director
and chairman of the board of directors, and the responsible principals
and responsible individuals, that FNS is proposing to disqualify them.
The notice will also specify:
(1) That FNS is proposing to disqualify the institution and the
responsible principals and responsible individuals;
(2) The basis for the actions;
(3) That, if the institution seeks to voluntarily terminate its
agreement after receiving the notice of proposed disqualification, the
institution and the responsible principals and responsible individuals
will be disqualified;
(4) The procedures for seeking an administrative review (in
accordance with paragraph (k) of this section) of the proposed
disqualifications;
(5) That unless participation has been suspended, the institution
may continue to participate and receive Program reimbursement for
eligible meals served and allowable administrative costs incurred until
its administrative review is completed; and
(6) That if the institution does not prevail in the administrative
review, any State agency holding an agreement with the institution will
be required to terminate that agreement and the institution is
prohibited from seeking an administrative review of the termination of
the agreement by the State agency(ies).
(E) Disqualification. When the time for requesting an administrative
review expires or when the administrative review official upholds FNS's
proposed disqualifications, FNS will notify the institution's executive
director and chairman of the board of directors, and the responsible
principals and responsible individuals, that the institution and the
responsible principal or responsible individual have been disqualified.
(F) Program payments. If the State agency holds an agreement with an
institution that FNS has determined to be seriously deficient, the State
agency must continue to pay any valid unpaid claims for reimbursement
for eligible meals served and allowable administrative expenses incurred
until the serious deficiency(ies) is corrected or the State agency
terminates the institution's agreement, including the period of any
administrative review, unless participation has been suspended.
(G) Required State agency action. (1) Disqualified institutions. If
the State agency holds an agreement with an institution that FNS
determines to be seriously deficient and subsequently disqualifies, the
State agency must terminate the institution's agreement effective no
later than 45 days after the date of the institution's disqualification
by FNS. As noted in paragraph (k)(3)(iv) of this section, the
termination is not subject to administrative review. At the same time
the notice of termination is issued, the State agency must add the
institution to the State agency list and provide a copy of the notice to
the appropriate FNSRO.
(2) Disqualified principals. If the State agency holds an agreement
with an institution whose principal FNS determines to be seriously
deficient and subsequently disqualifies, the State agency must determine
the institution to be seriously deficient and initiate action to
terminate and disqualify the institution in accordance with the
procedures in paragraph (c)(3) of this section. The State agency must
initiate these actions no later than 45 days after the date of the
principal's disqualification by FNS.
(7) National disqualified list--(i) Maintenance and availability of
list. FNS will maintain the National disqualified list and make it
available to all State agencies and all sponsoring organizations.
(ii) Effect on institutions. No organization on the National
disqualified list may participate in the Program as an institution. As
noted in paragraphs (b)(1)(xi) and (b)(2)(ii) of this section, the State
agency must deny the application of a new or renewing institution if the
institution is on the National disqualified list. In addition, as noted
in paragraphs (c)(3)(i) and (c)(6)(ii)(G)(1) of this section, the State
agency must terminate the agreement of any participating institution
that is disqualified by another State agency or by FNS.
(iii) Effect on sponsored centers. No organization on the National
disqualified list may participate in the Program as
[[Page 191]]
a sponsored center. As noted in Sec. 226.16(b) and paragraphs
(b)(1)(xi) and (b)(2)(ii) of this section, a sponsoring organization is
prohibited from submitting an application on behalf of a sponsored
facility (and a State agency is prohibited from approving such an
application) if the facility is on the National disqualified list.
(iv) Effect on individuals. No individual on the National
disqualified list may serve as a principal in any institution or
facility or as a day care home provider.
(A) Principal for an institution or a sponsored facility. As noted
in paragraphs (b)(1)(xi) and (b)(2)(ii) of this section, the State
agency must deny the application of a new or renewing institution if any
of the institution's principals is on the National disqualified list. As
noted in paragraphs (c)(3)(ii)(B) and (c)(6)(ii)(G)(2) of this section,
the State agency must declare an institution seriously deficient and
initiate action to terminate the institution's agreement and disqualify
the institution if the institution permits an individual who is on the
National disqualified list to serve in a principal capacity for the
institution or one of its facilities.
(B) Principal for a sponsored facility. As noted in Sec. 226.16(b)
and paragraphs (b)(1)(xi) and (b)(2)(ii) of this section, a sponsoring
organization is prohibited from submitting an application on behalf of a
sponsored facility (or a State agency from approving such an
application) if any of the facility's principals are on the National
disqualified list.
(C) Serving as a day care home. As noted in Sec. 226.16(b) and
paragraphs (b)(1)(xi) and (b)(2)(ii) of this section, a sponsoring
organization is prohibited from submitting an application on behalf of a
sponsored facility (and a State agency is prohibited from approving such
an application) if the facility is on the National disqualified list.
(v) Removal of institutions, principals, and individuals from the
list. Once included on the National disqualified list, an institution
and responsible principals and responsible individuals remain on the
list until such time as FNS, in consultation with the appropriate State
agency, determines that the serious deficiency(ies) that led to their
placement on the list has(ve) been corrected, or until seven years have
elapsed since they were disqualified from participation. However, if the
institution, principal or individual has failed to repay debts owed
under the Program, they will remain on the list until the debt has been
repaid.
(vi) Removal of day care homes from the list. Once included on the
National disqualified list, a day care home will remain on the list
until such time as the State agency determines that the serious
deficiency(ies) that led to its placement on the list has(ve) been
corrected, or until seven years have elapsed since its agreement was
terminated for cause. However, if the day care home has failed to repay
debts owed under the Program, it will remain on the list until the debt
has been repaid.
(8) State agency list. (i) Maintenance of the State agency list. The
State agency must maintain a State agency list (in the form of an actual
paper or electronic list or retrievable paper records). The list must be
made available to FNS upon request, and must include the following
information:
(A) Institutions determined to be seriously deficient by the State
agency, including the names and mailing addresses of the institutions
and the status of the institutions as they move through the possible
subsequent stages of corrective action, proposed termination,
suspension, agreement termination, and/or disqualification, as
applicable;
(B) Responsible principals and individuals who have been
disqualified from participation by the State agency, including their
names, mailing addresses, and dates of birth; and
(C) Day care home providers whose agreements have been terminated
for cause by a sponsoring organization in the State, including their
names, mailing addresses, and dates of birth.
(ii) Referral of disqualified day care homes to FNS. Within 10 days
of receiving a notice of termination and disqualification from a
sponsoring organization, the State agency must provide the appropriate
FNSRO the name, mailing address, and date of birth of each day care home
provider whose agreement is terminated for cause on or after July 29,
2002.
[[Page 192]]
(iii) Prior lists of disqualified day care homes. If on July 29,
2002 the State agency maintains a list of day care homes that have been
disqualified from participation, the State agency may continue to
prohibit participation by those day care homes. However, the State
agency must remove a day care home from its prior list no later than the
time at which the State agency determines that the serious
deficiency(ies) that led to the day care home's placement on the list
has(ve) been corrected or July 29, 2009 (unless the day care home has
failed to repay debts owed under the Program). If the day care home has
failed to repay its debt, the State agency may keep the day care home on
its prior list until the debt has been repaid.
(d) Licensing/approval for child care centers, outside-school-hours
care centers and day care homes. This section prescribes State agency
responsibilities to ensure that child care centers and day care homes
meet the licensing/approval criteria set forth in this part. Sponsoring
organizations shall submit to the State agency documentation that
facilities under their jurisdiction are in compliance with licensing/
approval requirements. Independent centers shall submit such
documentation to the State agency on their own behalf.
(1) General. Each State agency shall establish procedures to
annually review information submitted by institutions to ensure that all
participating child care centers, day care homes, and outside-school-
hours care centers either:
(i) Are licensed or approved by Federal, State, or local
authorities, provided that institutions which are approved for Federal
programs on the basis of State or local licensing shall not be eligible
for the Program if their licenses lapse or are terminated; or
(ii) Are complying with applicable procedures to renew licensing or
approval in situations where the State agency has no information that
licensing or approval will be denied; or
(iii) Receive Title XX funds for providing child care, if licensing
or approval is not available; or
(iv) Demonstrate compliance with applicable State or local child
care standards to the State agency, if licensing is not available and
title XX funds are not received; or
(v) Demonstrate compliance with CACFP child care standards to the
State agency, if licensing or approval is not available and Title XX
funds are not received.
(2) CACFP child care standards. (i) When licensing or approval is
not available, independent child care centers, and sponsoring
organizations on behalf of their child care centers or day care homes,
may elect to demonstrate compliance, annually, with the following CACFP
child care standards or other standards specified in paragraph (d)(3) of
this section:
(A) Staff/child ratios. (1) Day care homes provide care for no more
than 12 children at any one time. One home caregiver is responsible for
no more than 6 children ages 3 and above, or no more than 5 children
ages 0 and above. No more than 2 children under the age of 3 are in the
care of 1 caregiver. The home provider's own children who are in care
and under the age of 14 are counted in the maximum ratios of caregivers
to children.
(2) Child care centers and outside-school-hours care centers do not
fall below the following staff/child ratios:
(i) For children under 6 weeks of age--1:1
(ii) For children ages 6 weeks up to 3 years--1:4
(iii) For children ages 3 years up to 6 years--1:6
(iv) For children ages 6 years up to 10 years--1:15
(v) For children ages 10 and above--1:20
(B) Nondiscrimination. Day care services are available without
discrimination on the basis of race, color, national origin, sex, age,
or handicap.
(C) Safety and sanitation. (1) A current health/sanitation permit or
satisfactory report of an inspection conducted by local authorities
within the past 12 months shall be submitted.
(2) A current fire/building safety permit or satisfactory report of
an inspection conducted by local authorities within the past 12 months
shall be submitted.
(3) Fire drills are held in accordance with local fire/building
safety requirements.
[[Page 193]]
(D) Suitability of facilities. (1) Ventilation, temperature, and
lighting are adequate for children's safety and comfort.
(2) Floors and walls are cleaned and maintained in a condition safe
for children.
(3) Space and equipment, including rest arrangements for preschool
age children, are adequate for the number of age range of participating
children.
(E) Social services. Independent centers, and sponsoring
organizations in coordination with their facilities, have procedures for
referring families of children in care to appropriate local health and
social service agencies.
(F) Health services. (1) Each child is observed daily for
indications of difficulties in social adjustment, illness, neglect, and
abuse, and appropriate action is initiated.
(2) A procedure is established to ensure prompt notification of the
parent or guardian in the event of a child's illness or injury, and to
ensure prompt medical treatment in case of emergency.
(3) Health records, including records of medical examinations and
immunizations, are maintained for each enrolled child. (Not applicable
to day care homes.)
(4) At least one full-time staff member is currently qualified in
first aid, including artificial respiration techniques. (Not applicable
to day care homes.)
(5) First aid supplies are available.
(6) Staff members undergo initial and periodic health assessments.
(G) Staff training. The institution provides for orientation and
ongoing training in child care for all caregivers.
(H) Parental involvement. Parents are afforded the opportunity to
observe their children in day care.
(I) Self-evaluation. The institution has established a procedure for
periodic self-evaluation on the basis of CACFP child care standards.
(ii) When licensing or approval is not available, independent
outside-school-hours care centers, and sponsoring organizations on
behalf of their outside-school-hours care centers, may elect to
demonstrate compliance with child care standards developed by the State
agency which shall include, as a minimum, information on: (A) Fire/
safety, (B) sanitation, (C) organized activities, (D) kitchen and
restroom facilities, (E) appropriateness of games and materials, (F)
availability of emergency medical care, and (G) child-staff ratios as
indicated in Sec. 226.6(d)(2)(i)(A). For items (A) and (B), of this
paragraph, appropriate State or local permits are required.
(3) Alternate approval procedures. Each State agency shall establish
procedures to review information submitted by institutions for centers
or homes for which licensing or approval is not available in order to
establish eligibility for the Program. Licensing or approval is not
available when (i) no Federal, State, or local licensing/approval
standards have been established for child care centers, outside-school-
hours care centers, or day care homes; or (ii) no mechanism exists to
determine compliance with licensing/approval standards. In these
situations, independent centers, and sponsoring organizations on behalf
of their facilities, may choose to demonstrate compliance with either
CACFP child care standards, applicable State child care standards, or
applicable local child care standards. State agencies shall provide
information about applicable State child care standards and CACFP child
care standards to institutions, but may require institutions electing to
demonstrate compliance with applicable local child care standards to
identify and submit these standards. The State agency may permit
independent centers, and sponsoring organizations on behalf of their
facilities, to submit self-certification forms, and may grant approval
without first conducting a compliance review at the center or facility.
But the State agency shall require submission of health/sanitation and
fire/safety permits or certificates for all independent centers and
facilities seeking alternate child care standards approval. Compliance
with applicable child care standards are subject to review in accordance
with Sec. 226.6(o).
(e) Licensing/approval for adult day care centers. This paragraph
prescribes State agency responsibilities to ensure that adult day care
centers meet the licensing/approval criteria set forth in
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this part. Sponsoring organizations shall submit to the State agency
documentation that facilities under their jurisdiction are in compliance
with licensing/approval requirements. Independent adult day care centers
shall submit such documentation to the State agency on their own behalf.
Each State agency shall establish procedures to annually review
information submitted by institutions to ensure that all participating
adult day care centers either:
(1) Are licensed or approved by Federal, State or local authorities,
provided that institutions which are approved for Federal programs on
the basis of State or local licensing shall not be eligible for the
Program if their licenses lapse or are terminated; or
(2) Are complying with applicable procedures to renew licensing or
approval in situations where the State agency has no information that
licensing or approval will be denied.
(f) Miscellaneous responsibilities. State agencies must require
institutions to comply with the applicable provisions of this part and
must provide or collect the information specified in this paragraph (f).
(1) Annual responsibilities. In addition to its other
responsibilities under this part, each State agency must annually:
(i) Inform institutions that are pricing programs of their
responsibility to ensure that free and reduced-price meals are served to
participants unable to pay the full price;
(ii) Provide to all institutions a copy of the income standards to
be used by institutions for determining the eligibility of participants
for free and reduced-price meals under the Program;
(iii) Coordinate with the State agency that administers the National
School Lunch Program to ensure the receipt of a list of elementary
schools in the State in which at least one-half of the children enrolled
are certified eligible to receive free or reduced-price meals. The State
agency must provide the list to sponsoring organizations of day care
homes by February 15 of each year, unless the State agency that
administers the National School Lunch Program has elected to base data
for the list on a month other than October, in which case the State
agency must provide the list to such sponsoring organizations within 15
calendar days of its receipt from the State agency that administers the
National School Lunch Program. The State agency must also provide each
sponsoring organization of day care homes with census data, as provided
to the State agency by FNS upon its availability on a decennial basis,
showing areas in the State in which at least 50 percent of the children
are from households meeting the income standards for free or reduced-
price meals. In addition, the State agency must ensure that the most
recent available data is used if the determination of a day care home's
eligibility as a tier I day care home is made using school or census
data. Determinations of a day care home's eligibility as a tier I day
care home must be valid for one year if based on a provider's household
income, five years if based on school data, or until more current data
are available if based on census data. However, a sponsoring
organization, the State agency, or FNS may change the determination if
information becomes available indicating that a day care home is no
longer in a qualified area. The State agency must not routinely require
annual redeterminations of the tiering status of tier I day care homes
based on updated elementary school data;
(iv) Provide all sponsoring organizations of day care homes in the
State with a listing of State-funded programs, participation in which by
a parent or child will qualify a meal served to a child in a tier II
home for the tier I rate of reimbursement;
(v) Require centers to submit current eligibility information on
enrolled participants, in order to calculate a blended rate or claiming
percentage in accordance with Sec. 226.9(b);
(vi) Require each sponsoring organization to submit an
administrative budget with sufficiently detailed information concerning
projected CACFP administrative earnings and expenses, as well as other
non-Program funds to be used in Program administration, for the State
agency to determine the allowability, necessity, and reasonableness of
all proposed expenditures, and to assess the sponsoring organization's
capability to manage Program funds.
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The administrative budget must demonstrate that the sponsoring
organization will expend and account for funds in accordance with
regulatory requirements, FNS Instruction 796-2 (``Financial Management
in the Child and Adult Care Food Program''), parts 3015, 3016, and 3019
of this title, and applicable Office of Management and Budget circulars.
In addition, the administrative budget submitted by a sponsor of centers
must demonstrate that the administrative costs to be charged to the
Program do not exceed 15 percent of the meal reimbursements estimated or
actually earned during the budget year, unless the State agency grants a
waiver in accordance with Sec. 226.7(g);
(vii) Require each institution to issue a media release, unless the
State agency has issued a Statewide media release on behalf of all its
institutions;
(viii) Require each independent center to provide information
concerning its licensing/approval status, and require each sponsoring
organization to provide information concerning the licensing/approval
status of its facilities, unless the State agency has other means of
confirming the licensing/approval status of any independent center or
facility providing care;
(ix) Require each sponsoring organization to submit verification
that all facilities under its sponsorship have adhered to the training
requirements set forth in Program regulations; and
(x) Require each sponsoring organization of family day care homes to
submit to the State agency a list of family day care home providers
receiving tier I benefits on the basis of their participation in the
Food Stamp Program. Within 30 days of receiving this list, the State
agency will provide this list to the State agency responsible for the
administration of the Food Stamp Program.
(2) Triennial responsibilities. In addition to its other
responsibilities under this part, each State agency must, at intervals
not to exceed 36 months:
(i) Require participating institutions to re-apply to continue their
participation; and
(ii) Require sponsoring organizations to submit a management plan
with the elements set forth in paragraph (b)(1)(iv) of this section.
(3) Other responsibilities. At intervals and in a manner specified
by the State agency, but not more frequently than annually, the State
agency may:
(i) Require independent centers to submit a budget with sufficiently
detailed information and documentation to enable the State agency to
make an assessment of the independent center's qualifications to manage
Program funds. Such budget must demonstrate that the independent center
will expend and account for funds in accordance with regulatory
requirements, FNS Instruction 796-2 (``Financial Management in the Child
and Adult Care Food Program''), parts 3015, 3016 and 3019 of this title
and applicable Office of Management and Budget circulars;
(ii) Request institutions to report their commodity preference;
(iii) Require a private nonprofit institution to submit evidence of
tax exempt status in accordance with Sec. 226.15(a);
(iv) Require for-profit child care centers and for-profit outside-
school-hours care centers to submit documentation of:
(A) Eligibility of at least 25 percent of children in care (enrolled
or licensed capacity, whichever is less) for free or reduced price
meals; or
(B) Compensation received under title XX of the Social Security Act
for nonresidential day care services and certification that at least 25
percent of children in care (enrolled or licensed capacity, whichever is
less) were title XX beneficiaries during the most recent calendar month.
(v) Require for-profit adult care centers to submit documentation
that they are currently providing nonresidential day care services for
which they receive compensation under title XIX or title XX of the
Social Security Act, and certification that not less than 25 percent of
enrolled participants in each such center during the most recent
calendar month were title XIX or title XX beneficiaries;
(vi) Request each institution to indicate its choice to receive all,
part or none of advance payments, if the State agency chooses to make
advance payments available; and
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(vii) Perform verification in accordance with Sec. 226.23(h) and
paragraph (m)(4) of this section. State agencies verifying the
information on free and reduced-price applications must ensure that
verification activities are conducted without regard to the
participant's race, color, national origin, sex, age, or disability.
(g) Program expansion. Each State agency must take action to expand
the availability of benefits under this Program, and must conduct
outreach to potential sponsoring organizations of family day care homes
that might administer the Program in low-income or rural areas.
(h) Commodity distribution. The State agency must require new
institutions to state their preference to receive commodities or cash-
in-lieu of commodities when they apply, and may periodically inquire as
to participating institutions' preference to receive commodities or
cash-in-lieu of commodities. State agencies must annually provide
institutions with information on foods available in plentiful supply,
based on information provided by the Department. Each institution
electing cash-in-lieu of commodities shall receive such payments. Each
institution which elects to receive commodities shall have commodities
provided to it unless the State agency, after consultation with the
State commodity distribution agency, demonstrates to FNS that
distribution of commodities to the number of such institutions would be
impracticable. The State agency may then, with the concurrence of FNS,
provide cash-in-lieu of commodities for all institutions. A State agency
request for cash-in-lieu of all commodities shall be submitted to FNS
not later than May 1 of the school year preceding the school year for
which the request is made. The State agency shall, by June 1 of each
year, submit a list of institutions which have elected to receive
commodities to the State commodity distribution agency, unless FNS has
approved a request for cash-in-lieu of commodities for all institutions.
The list shall be accompanied by information on the average daily number
of lunches and suppers to be served to participants by each such
institution.
(i) Standard contract. Each State agency shall develop a standard
contract in accordance with Sec. 226.21 and provide for its use between
institutions and food service management companies. The contract shall
expressly and without exception stipulate:
(1) The institution shall provide the food service management
company with a list of the State agency approved child care centers, day
care homes, adult day care centers, and outside-school-hours care
centers to be furnished meals by the food service management company,
and the number of meals, by type, to be delivered to each location;
(2) The food service management company shall maintain such records
(supported by invoices, receipts or other evidence) as the institution
will need to meet its responsibilities under this part, and shall
promptly submit invoices and delivery reports to the institution no less
frequently than monthly;
(3) The food service management company shall have Federal, State or
local health certification for the plant in which it proposes to prepare
meals for use in the Program, and it shall ensure that health and
sanitation requirements are met at all times. In addition, the State
agency may require the food service management company to provide for
meals which it prepares to be periodically inspected by the local health
department or an independent agency to determine bacteria levels in the
meals being prepared. These bacteria levels shall conform to the
standards which are applied by the local health authority with respect
to the level of bacteria which may be present in meals prepared or
served by other establishments in the locality. Results of these
inspections shall be submitted to the institution and to the State
agency;
(4) The meals served under the contract shall conform to the cycle
menus upon which the bid was based, and to menu changes agreed upon by
the institution and food service management company;
(5) The books and records of the food service management company
pertaining to the institution's food service
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operation shall be available for inspection and audit by representatives
of the State agency, of the Department, and of the U.S. General
Accounting Office at any reasonable time and place, for a period of 3
years from the date of receipt of final payment under the contract, or
in cases where an audit requested by the State agency or the Department
remains unresolved, until such time as the audit is resolved;
(6) The food service management company shall operate in accordance
with current Program regulations;
(7) The food service management company shall not be paid for meals
which are delivered outside of the agreed upon delivery time, are
spoiled or unwholesome at the time of delivery, or do not otherwise meet
the meal requirements contained in the contract;
(8) Meals shall be delivered in accordance with a delivery schedule
prescribed in the contract;
(9) Increases and decreases in the number of meal orders may be made
by the institution, as needed, within a prior notice period mutually
agreed upon in the contract;
(10) All meals served under the Program shall meet the requirements
of Sec. 226.20;
(11) All breakfasts, lunches, and suppers delivered for service in
outside-school-hours care centers shall be unitized, with or without
milk, unless the State agency determines that unitization would impair
the effectiveness of food service operations. For meals delivered to
child care centers and day care homes, the State agency may require
unitization, with or without milk, of all breakfasts, lunches, and
suppers only if the State agency has evidence which indicates that this
requirement is necessary to ensure compliance with Sec. 226.20.
(j) Procurement provisions. State agencies must require institutions
to adhere to the procurement provisions set forth in Sec. 226.22 and
must determine that all meal procurements with food service management
companies are in conformance with bid and contractual requirements of
Sec. 226.22.
(k) Administrative reviews for institutions and responsible
principals and responsible individuals--(1) General. The State agency
must develop procedures for offering administrative reviews to
institutions and responsible principals and responsible individuals. The
procedures must be consistent with paragraph (k) of this section.
(2) Actions subject to administrative review. Except as provided in
Sec. 226.8(g), the State agency must offer an administrative review for
the following actions:
(i) Application denial. Denial of a new or renewing institution's
application for participation (see paragraph (b) of this section, on
State agency review of an institution's application; and paragraphs
(c)(1) and (c)(2) of this section, on State agency denial of a new or
renewing institution's application);
(ii) Denial of sponsored facility application. Denial of an
application submitted by a sponsoring organization on behalf of a
facility;
(iii) Notice of proposed termination. Proposed termination of an
institution's agreement (see paragraphs (c)(2)(iii)(C), (c)(3)(iii)(C),
and (c)(5)(i)(B) of this section, dealing with proposed termination of
agreements with renewing institutions, participating institutions, and
participating institutions suspended for health or safety violations);
(iv) Notice of proposed disqualification of a responsible principal
or responsible individual. Proposed disqualification of a responsible
principal or responsible individual (see paragraphs (c)(1)(iii)(C),
(c)(2)(iii)(C), (c)(3)(iii)(C), and (c)(5)(i)(B) of this section,
dealing with proposed disqualification of responsible principals or
responsible individuals in new, renewing, and participating
institutions, and participating institutions suspended for health or
safety violations);
(v) Suspension of participation. Suspension of an institution's
participation (see paragraphs (c)(5)(i)(B) and (c)(5)(ii)(D) of this
section, dealing with suspension for health or safety reasons or
submission of a false or fraudulent claim);
(vi) Start-up or expansion funds denial. Denial of an institution's
application for start-up or expansion payments (see Sec. 226.7(h));
[[Page 198]]
(vii) Advance denial. Denial of a request for an advance payment
(see Sec. 226.10(b));
(viii) Recovery of advances. Recovery of all or part of an advance
in excess of the claim for the applicable period. The recovery may be
through a demand for full repayment or an adjustment of subsequent
payments (see Sec. 226.10(b)(3));
(ix) Claim denial. Denial of all or a part of an institution's claim
for reimbursement (except for a denial based on a late submission under
Sec. 226.10(e)) (see Sec. Sec. 226.10(f) and 226.14(a));
(x) Claim deadline exceptions and requests for upward adjustments to
a claim. Decision by the State agency not to forward to FNS an exception
request by an institution for payment of a late claim, or a request for
an upward adjustment to a claim (see Sec. 226.10(e));
(xi) Overpayment demand. Demand for the remittance of an overpayment
(see Sec. 226.14(a)); and
(xii) Other actions. Any other action of the State agency affecting
an institution's participation or its claim for reimbursement.
(3) Actions not subject to administrative review. The State agency
is prohibited from offering administrative reviews of the following
actions:
(i) FNS decisions on claim deadline exceptions and requests for
upward adjustments to a claim. A decision by FNS to deny an exception
request by an institution for payment of a late claim, or for an upward
adjustment to a claim (see Sec. 226.10(e));
(ii) Determination of serious deficiency. A determination that an
institution is seriously deficient (see paragraphs (c)(1)(iii)(A),
(c)(2)(iii)(A), (c)(3)(iii)(A), and (c)(5)(i)(B) of this section,
dealing with proposed disqualification of responsible principals or
responsible individuals in new, renewing, and participating
institutions, and participating institutions suspended for health or
safety violations);
(iii) Disqualification and placement on State agency list and
National disqualified list. Disqualification of an institution or a
responsible principal or responsible individual, and the subsequent
placement on the State agency list and the National disqualified list
(see paragraphs (c)(1)(iii)(E), (c)(2)(iii)(E), (c)(3)(iii)(E), and
(c)(5)(i)(C) of this section, dealing with proposals to disqualify
related to new, renewing, and participating institutions, and in
institutions suspended for health or safety violations); or
(iv) Termination. Termination of a participating institution's
agreement, including termination of a participating institution's
agreement based on the disqualification of the institution by another
State agency or FNS (see paragraphs (c)(3)(i) and (c)(7)(ii) of this
section).
(4) Provision of administrative review procedures to institutions
and responsible principals and responsible individuals. The State
agency's administrative review procedures must be provided:
(i) Annually to all institutions;
(ii) To an institution and to each responsible principal and
responsible individual when the State agency takes any action subject to
an administrative review as described in paragraph (k)(2) of this
section; and
(iii) Any other time upon request.
(5) Procedures. Except as described in paragraph (k)(9) of this
section, which sets forth the circumstances under which an abbreviated
administrative review is held, the State agency must follow the
procedures in this paragraph (k)(5) when an institution or a responsible
principal or responsible individual appeals any action subject to
administrative review as described in paragraph (k)(2) of this section.
(i) Notice of action. The institution's executive director and
chairman of the board of directors, and the responsible principals and
responsible individuals, must be given notice of the action being taken
or proposed, the basis for the action, and the procedures under which
the institution and the responsible principals or responsible
individuals may request an administrative review of the action.
(ii) Time to request administrative review. The request for
administrative review must be submitted in writing not later than 15
days after the date the notice of action is received, and the State
agency must acknowledge the receipt of the request for an administrative
review within 10 days of its receipt of the request.
[[Page 199]]
(iii) Representation. The institution and the responsible principals
and responsible individuals may retain legal counsel, or may be
represented by another person.
(iv) Review of record. Any information on which the State agency's
action was based must be available to the institution and the
responsible principals and responsible individuals for inspection from
the date of receipt of the request for an administrative review.
(v) Opposition. The institution and the responsible principals and
responsible individuals may refute the findings contained in the notice
of action in person or by submitting written documentation to the
administrative review official. In order to be considered, written
documentation must be submitted to the administrative review official
not later than 30 days after receipt of the notice of action.
(vi) Hearing. A hearing must be held by the administrative review
official in addition to, or in lieu of, a review of written information
only if the institution or the responsible principals and responsible
individuals request a hearing in the written request for an
administrative review. If the institution's representative, or the
responsible principals or responsible individuals or their
representative, fail to appear at a scheduled hearing, they waive the
right to a personal appearance before the administrative review
official, unless the administrative review official agrees to reschedule
the hearing. A representative of the State agency must be allowed to
attend the hearing to respond to the testimony of the institution and
the responsible principals and responsible individuals and to answer
questions posed by the administrative review official. If a hearing is
requested, the institution, the responsible principals and responsible
individuals, and the State agency must be provided with at least 10 days
advance notice of the time and place of the hearing.
(vii) Administrative review official. The administrative review
official must be independent and impartial. This means that, although
the administrative review official may be an employee of the State
agency, he/she must not have been involved in the action that is the
subject of the administrative review, or have a direct personal or
financial interest in the outcome of the administrative review. The
institution and the responsible principals and responsible individuals
must be permitted to contact the administrative review official directly
if they so desire.
(viii) Basis for decision. The administrative review official must
make a determination based solely on the information provided by the
State agency, the institution, and the responsible principals and
responsible individuals, and based on Federal and State laws,
regulations, policies, and procedures governing the Program.
(ix) Time for issuing a decision. Within 60 days of the State
agency's receipt of the request for an administrative review, the
administrative review official must inform the State agency, the
institution's executive director and chairman of the board of directors,
and the responsible principals and responsible individuals, of the
administrative review's outcome. This timeframe is an administrative
requirement for the State agency and may not be used as a basis for
overturning the State agency's action if a decision is not made within
the specified timeframe.
(x) Final decision. The determination made by the administrative
review official is the final administrative determination to be afforded
the institution and the responsible principals and responsible
individuals.
(6) Federal audit findings. FNS may assert a claim against the State
agency, in accordance with the procedures set forth in Sec. 226.14(c),
when an administrative review results in the dismissal of a claim
against an institution asserted by the State agency based upon Federal
audit findings.
(7) Record of result of administrative reviews. The State agency
must maintain searchable records of all administrative reviews and their
disposition.
(8) Combined administrative reviews for responsible principals and
responsible individuals. The State agency must conduct the
administrative review of the proposed disqualification of the
responsible principals and responsible individuals as part of the
administrative review of the application denial, proposed termination,
and/or proposed disqualification of the institution with
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which the responsible principals or responsible individuals are
associated. However, at the administrative review official's discretion,
separate administrative reviews may be held if the institution does not
request an administrative review or if either the institution or the
responsible principal or responsible individual demonstrates that their
interests conflict.
(9) Abbreviated administrative review. The State agency must limit
the administrative review to a review of written submissions concerning
the accuracy of the State agency's determination if the application was
denied or the State agency proposes to terminate the institution's
agreement because:
(i) The information submitted on the application was false (see
paragraphs (c)(1)(ii)(A), (c)(2)(ii)(A), and (c)(3)(ii)(A) of this
section);
(ii) The institution, one of its sponsored facilities, or one of the
principals of the institution or its facilities is on the national
disqualified list (see paragraph (b)(12) of this section);
(iii) The institution, one of its sponsored facilities, or one of
the principals of the institution or its facilities is ineligible to
participate in any other publicly funded program by reason of violation
of the requirements of the program (see paragraph (b)(13) and
(c)(3)(ii)(S) of this section); or
(iv) The institution, one of its sponsored facilities, or one of the
principals of the institution or its facilities has been convicted for
any activity that indicates a lack of business integrity (see paragraphs
(b)(14) and (c)(3)(ii)(T) of this section).
(10) Effect of State agency action. The State agency's action must
remain in effect during the administrative review. The effect of this
requirement on particular State agency actions is as follows.
(i) Overpayment demand. During the period of the administrative
review, the State agency is prohibited from taking action to collect or
offset the overpayment. However, the State agency must assess interest
beginning with the initial demand for remittance of the overpayment and
continuing through the period of administrative review unless the
administrative review official overturns the State agency's action.
(ii) Recovery of advances. During the administrative review, the
State agency must continue its efforts to recover advances in excess of
the claim for reimbursement for the applicable period. The recovery may
be through a demand for full repayment or an adjustment of subsequent
payments.
(iii) Program payments. The availability of Program payments during
an administrative review of the denial of a new institution's
application, denial of a renewing institution's application, proposed
termination of a participating institution's agreement, and suspension
of an institution are addressed in paragraphs (c)(1)(iii)(D),
(c)(2)(iii)(D), (c)(3)(iii)(D), (c)(5)(i)(D), and (c)(5)(ii)(E),
respectively, of this section.
(l) Administrative reviews for day care homes--(1) General. The
State agency must ensure that, when a sponsoring organization proposes
to terminate its Program agreement with a day care home for cause, the
day care home is provided an opportunity for an administrative review of
the proposed termination. The State agency may do this either by
electing to offer a State-level administrative review, or by electing to
require the sponsoring organization to offer an administrative review.
The State agency must notify the appropriate FNSRO of its election under
this option, or any change it later makes under this option, by
September 25, 2002 or within 30 days of any subsequent change under this
option. The State agency must make the same election with regard to who
offers the administrative review to any day care home in the Program in
that State. The State agency or the sponsoring organization must develop
procedures for offering and providing these administrative reviews, and
these procedures must be consistent with this paragraph (l).
(2) Actions subject to administrative review. The State agency or
sponsoring organization must offer an administrative review to a day
care home that appeals a notice of intent to terminate their agreement
for cause or a suspension of their participation (see Sec. Sec.
226.16(l)(3)(iii) and (l)(4)(ii)).
[[Page 201]]
(3) Actions not subject to administrative review. Neither the State
agency nor the sponsoring organization is required to offer an
administrative review for reasons other than those listed in paragraph
(l)(2) of this section.
(4) Provision of administrative review procedures to day care homes.
The administrative review procedures must be provided:
(i) Annually to all day care homes;
(ii) To a day care home when the sponsoring organization takes any
action subject to an administrative review as described in paragraph
(l)(2) of this section; and
(iii) Any other time upon request.
(5) Procedures. The State agency or sponsoring organization, as
applicable (depending on the State agency's election pursuant to
paragraph (l)(1) of this section) must follow the procedures in this
paragraph (l)(5) when a day care home requests an administrative review
of any action described in paragraph (l)(2) of this section.
(i) Uniformity. The same procedures must apply to all day care
homes.
(ii) Representation. The day care home may retain legal counsel, or
may be represented by another person.
(iii) Review of record and opposition. The day care home may review
the record on which the decision was based and refute the action in
writing. The administrative review official is not required to hold a
hearing.
(iv) Administrative review official. The administrative review
official must be independent and impartial. This means that, although
the administrative review official may be an employee of the State
agency or an employee or board member of the sponsoring organization,
he/she must not have been involved in the action that is the subject of
the administrative review or have a direct personal or financial
interest in the outcome of the administrative review;
(v) Basis for decision. The administrative review official must make
a determination based on the information provided by the sponsoring
organization and the day care home and on Federal and State laws,
regulations, polices, and procedures governing the Program.
(vi) Time for issuing a decision. The administrative review official
must inform the sponsoring organization and the day care home of the
administrative review's outcome within the period of time specified in
the State agency's or sponsoring organization's administrative review
procedures. This timeframe is an administrative requirement for the
State agency or sponsoring organization and may not be used as a basis
for overturning the termination if a decision is not made within the
specified timeframe.
(vii) Final decision. The determination made by the administrative
review official is the final administrative determination to be afforded
the day care home.
(m) Program assistance--(1) General. The State agency must provide
technical and supervisory assistance to institutions and facilities to
facilitate effective Program operations, monitor progress toward
achieving Program goals, and ensure compliance with all requirements of
title VI of the Civil Rights Act of 1964, title IX of the Education
amendments of 1972, section 504 of the Rehabilitation Act of 1973, the
Age Discrimination Act of 1975, and the Department's regulations
concerning nondiscrimination (parts 15, 15a, and 15b of this title). The
State agency must maintain documentation of supervisory assistance
activities, including reviews conducted, corrective actions prescribed,
and follow-up efforts.
(2) Review priorities. In choosing institutions for review, in
accordance with paragraph (m)(6) of this section, the State agency must
target for more frequent review institutions whose prior review included
a finding of serious deficiency.
(3) Review content. As part of its conduct of reviews, the State
agency must assess each institution's compliance with the requirements
of this part pertaining to:
(i) Recordkeeping;
(ii) Meal counts;
(iii) Administrative costs;
(iv) Any applicable instructions and handbooks issued by FNS and the
Department to clarify or explain this part, and any instructions and
handbooks issued by the State agency which are not inconsistent with the
provisions of this part;
(v) Facility licensing and approval;
[[Page 202]]
(vi) Compliance with the requirements for annual updating of
enrollment forms;
(vii) If an independent center, observation of a meal service;
(viii) If a sponsoring organization, training and monitoring of
facilities;
(ix) If a sponsoring organization of day care homes, implementation
of the serious deficiency and termination procedures for day care homes
and, if such procedures have been delegated to sponsoring organizations
in accordance with paragraph (l)(1) of this section, the administrative
review procedures for day care homes;
(x) If a sponsoring organization, implementation of the household
contact system established by the State agency pursuant to paragraph
(m)(5) of this section;
(xi) If a sponsoring organization of day care homes, the
requirements for classification of tier I and tier II day care homes;
and
(xii) All other Program requirements.
(4) Review of sponsored facilities. As part of each required review
of a sponsoring organization, the State agency must select a sample of
facilities, in accordance with paragraph (m)(6) of this section. As part
of such reviews, the State agency must conduct verification of Program
applications in accordance with Sec. 226.23(h) and must compare
available enrollment and attendance records and the sponsoring
organization's review results for that facility to meal counts submitted
by those facilities for five days.
(5) Household contacts. As part of their monitoring of institutions,
State agencies must establish systems for making household contacts to
verify the enrollment and attendance of participating children. Such
systems must specify the circumstances under which household contacts
will be made, as well as the procedures for conducting household
contacts. In addition, State agencies must establish a system for
sponsoring organizations to use in making household contacts as part of
their review and oversight of participating facilities. Such systems
must specify the circumstances under which household contacts will be
made, as well as the procedures for conducting household contacts. State
agencies must submit to FNSROs, no later than April 1, 2005, the
policies and procedures they have developed governing household contacts
conducted by both the State agency, as part of institution and facility
reviews conducted in accordance with this paragraph (m), and by
sponsoring organizations as part of the facility review process
described in Sec. 226.16(d)(5).
(6) Frequency and number of required institution reviews. The State
agency must annually review at least 33.3 percent of all institutions.
At least 15 percent of the total number of facility reviews required
must be unannounced. The State agency must review institutions according
to the following schedule:
(i) Independent centers and sponsoring organizations of 1 to 100
facilities must be reviewed at least once every three years. A review of
such a sponsoring organization must include reviews of 10 percent of the
sponsoring organization's facilities;
(ii) Sponsoring organizations with more than 100 facilities must be
reviewed at least once every two years. These reviews must include
reviews of 5 percent of the first 1,000 facilities and 2.5 percent of
the facilities in excess of 1,000; and
(iii) New institutions that are sponsoring organizations of five or
more facilities must be reviewed within the first 90 days of Program
operations.
(n) Program irregularities. Each State agency shall promptly
investigate complaints received or irregularities noted in connection
with the operation of the Program, and shall take appropriate action to
correct any irregularities. State agencies shall maintain on file
evidence of such investigations and actions. FNS and OIG may make
investigations at the request of the State agency, or whenever FNS or
OIG determines that investigations are appropriate.
(o) Child care standards compliance. The State agency shall, when
conducting administrative reviews of child care centers, outside-school-
hours care centers, and day care homes approved by the State agency
under paragraph (d)(3) of this section, determine compliance with the
child care standards used
[[Page 203]]
to establish eligibility, and the institution shall ensure that all
violations are corrected and the State shall ensure that the institution
has corrected all violations. If violations are not corrected within the
specified timeframe for corrective action, the State agency must issue a
notice of serious deficiency in accordance with paragraph (c) of this
section or Sec. 226.16(l), as appropriate. However, if the health or
safety of the children is imminently threatened, the State agency or
sponsoring organization must follow the procedures set forth at
paragraph (c)(5)(i) of this section, or Sec. 226.16(l)(4), as
appropriate. The State agency may deny reimbursement for meals served to
attending children in excess of authorized capacity.
(p) Sponsoring organization agreement. Each State agency shall
develop and provide for the use of a standard form of written permanent
agreement between each day care home sponsoring organization and all day
care homes participating in the Program under such organization. Nothing
in the preceding sentence shall be construed to limit the ability of the
sponsoring organization to suspend or terminate the permanent agreement
in accordance with Sec. 226.16(l). The State agency must also include
in this agreement its policy to restrict transfers of day care homes
between sponsoring organizations. The policy must restrict the transfers
to no more frequently than once per year, except under extenuating
circumstances, such as termination of the sponsoring organization's
agreement or other circumstances defined by the State agency. However,
the State agency may, at the request of the sponsor, approve an
agreement developed by the sponsor. State agencies may develop a similar
form for use between sponsoring organizations and other types of
facilities.
(q) Following its reviews of institutions and facilities under
Sec. Sec. 226.6(m) and 226.23(h) conducted prior to July 1, 1988, the
State agency shall report data on key elements of program operations on
a form designated by FNS. These key elements include but are not limited
to the program areas of meal requirements, determination of eligibility
for free and reduced price meals, and the accuracy of reimbursement
claims. These forms shall be submitted within 90 days of the completion
of the data collection for the institutions except that, if the State
has elected to conduct reviews of verification separate from its
administrative reviews, the State shall retain data until all key
elements have been reviewed and shall report all data for each
institution on one form within 90 days of the completion of the data
collection for all key elements for that institution. States shall
ensure that all key element data for an institution is collected during
a 12-month period.
(r) WIC program information. State agencies must provide information
on the importance and benefits of the Special Supplemental Nutrition
Program for Women, Infants, and Children (WIC) and WIC income
eligibility guidelines, to participating institutions. In addition, the
State agency must ensure that:
(1) Participating family day care homes and sponsored child care
centers receive this information, and periodic updates of this
information, from their sponsoring organizations or the State agency;
and
(2) The parents of enrolled children also receive this information.
[47 FR 36527, Aug. 20, 1982]
Editorial Note: For Federal Register citations affecting Sec.
226.6, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 226.7 State agency responsibilities for financial management.
(a) This section prescribes standards of financial management
systems in administering Program funds by the State agency and
institutions.
(b) Each State agency shall maintain an acceptable financial
management system, adhere to financial management standards and
otherwise carry out financial management policies as delineated in the
Uniform Federal Assistance Regulations, at 7 CFR part 3015. State
agencies or FNSRO's, where applicable, shall also have a system in place
for monitoring and reviewing the institutions' documentation of their
nonprofit status to ensure that all Program reimbursement funds are
used: (1)
[[Page 204]]
Solely for the conduct of the food service operation; or (2) to improve
such food service operations, principally for the benefit of the
participants.
(c) Management evaluations and audits. State agencies shall provide
FNS with full opportunity to conduct management evaluations (including
visits to institutions and facilities) of all operations of the State
agency under the Program and shall provide OIG with full opportunity to
conduct audits (including visits to institutions and facilities) of all
operations of the State agency under the Program. Within 60 calendar
days of receipt of each management evaluation report, the State agency
shall submit to FNSRO a written plan for correcting serious
deficiencies, including specific timeframes for accomplishing corrective
actions and initiating follow-up efforts. If a State agency makes a
showing of good cause, however, FNS may allow more than 60 days in which
to submit a plan. Each State agency shall make available its records,
including records of the receipt and expenditure of funds, upon request
by FNS or OIG. OIG shall also have the right to make audits of the
records and operation of any institution.
(d) Reports. Each State agency shall submit to FNS the final Report
of the Child and Adult Care Food Program (FNS 44) for each month which
shall be limited to claims submitted in accordance with Sec. 226.10(e)
and which shall be postmarked and/or submitted no later than 90 days
following the last day of the month covered by the report. States shall
not receive Program funds for any month for which the final report is
not submitted within this time limit unless FNS grants an exception.
Upward adjustments to a State agency's report shall not be made after 90
days from the month covered by the report unless authorized by FNS.
Downward adjustments shall always be made, without FNS authorization,
regardless of when it is determined that such adjustments are necessary.
Adjustments shall be reported to FNS in accordance with procedures
established by FNS. Each State agency shall also submit to FNS a
quarterly Financial Status Report (SF-269) on the use of Program funds.
Such reports shall be postmarked and/or submitted no later than 30 days
after the end of each fiscal year quarter. Obligations shall be reported
only for the fiscal year in which they occur. A final Financial Status
Report for each fiscal year shall be postmarked and/or submitted to FNS
within 120 days after the end of the fiscal year. FNS shall not be
responsible for reimbursing unpaid Program obligations reported later
than 120 days after the close of the fiscal year in which they were
incurred.
(e) Annual plan. Each State shall submit to the Secretary for
approval by August 15 of each year an annual plan for the use of State
administrative expense funds, including a staff formula for State
personnel.
(f) Rate assignment. Each State agency shall require institutions
(other than sponsoring organizations for day care homes) to submit, not
less frequently than annually, information necessary to assign rates of
reimbursement as outlined in Sec. 226.9.
(g) Budget approval. The State agency must review institution
budgets and must limit allowable administrative claims by each
sponsoring organization to the administrative costs approved in its
budget. The budget must demonstrate the institution's ability to manage
Program funds in accordance with this part, FNS Instruction 796-2
(``Financial Management in the Child and Adult Care Food Program''),
parts 3015, 3016, and 3019 of this title, and applicable Office of
Management and Budget circulars. Sponsoring organizations must submit an
administrative budget to the State agency annually, and independent
centers must submit budgets as frequently as required by the State
agency. Budget levels may be adjusted to reflect changes in Program
activities. For sponsoring organizations of centers, the State agency is
prohibited from approving the sponsoring organization's administrative
budget, or any amendments to the budget, if the administrative budget
shows the Program will be charged for administrative costs in excess of
15 percent of the meal reimbursements estimated to be earned during the
budget year. However, the State agency may waive this limit if the
sponsoring organization provides justification that it
[[Page 205]]
requires Program funds in excess of 15 percent to pay its administrative
costs and if the State agency is convinced that the institution will
have adequate funding to provide meals meeting the requirements of Sec.
226.20. The State agency must document all waiver approvals and denials
in writing, and must provide a copy of all such letters to the
appropriate FNSRO.
(h) Start-up and expansion payments. Each State agency shall
establish procedures for evaluating requests for start-up and expansion
payments, issuing these payments to eligible sponsoring organizations,
and monitoring the use of these payments.
(i) Advance payments. Each State agency shall establish procedures
for issuing advance payments by the first day of each month and
comparing these payments with earned reimbursement on a monthly basis.
The State agency shall maintain on file a statement of the State's law
and policy governing the use of interest earned on advanced funds by
sponsors, institutions, child care facilities and adult day care
facilities.
(j) Recovery of overpayments. Each State agency shall establish
procedures to recover outstanding start-up, expansion and advance
payments from institutions which, in the opinion of the State agency,
will not be able to earn these payments.
(k) Claims processing. Each State agency shall establish procedures
for institutions to properly submit claims for reimbursement. Such
procedures must include State agency edit checks, including but not
limited to ensuring that payments are made only for approved meal types
and that the number of meals for which reimbursement is provided does
not exceed the product of the total enrollment times operating days
times approved meal types. All valid claims shall be paid within 45
calendar days of receipt. Within 15 calendar days of receipt of any
incomplete or incorrect claim which must be revised for payment, the
State agency shall notify the institution as to why and how such claim
must be revised. If the State agency disallows partial or full payment
for a claim for reimbursement, it shall notify the institution which
submitted the claim of its right to appeal under Sec. 226.6(k). State
agencies may permit disallowances to be appealed separately from claims
for reimbursement.
(l) Participation controls. The State agency may establish control
procedures to ensure that payment is not made for meals served to
participants attending in excess of the authorized capacity of each
independent center, adult day care facility or child care facility.
(m) Financial management system. Each State agency shall establish a
financial management system in accordance with the Uniform Federal
Assistance Regulations, 7 CFR part 3015, and FNS guidance to identify
allowable Program costs and establish standards for institutional
recordkeeping and reporting. These standards shall (1) prohibit claiming
reimbursement for meals provided by a participant's family, except as
authorized by Sec. 226.18(e) and (2) allow the cost of meals served to
adults who perform necessary food service labor under the Program,
except in day care homes. The State agency shall provide guidance on
financial management requirements to each institution.
[47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983;
Amdt. 5, 49 FR 18988, May 4, 1984; 50 FR 8580, Mar. 4, 1985; 50 FR
26975, July 1, 1985; 53 FR 52589, Dec. 28, 1988; Amdt. 22, 55 FR 1378,
Jan. 14, 1990; 63 FR 9728, Feb. 26, 1998; 67 FR 43490, June 27, 2002; 69
FR 53542, Sept. 1, 2004]
Sec. 226.8 Audits.
(a) Unless otherwise exempt, audits at the State and institution
levels must be conducted in accordance with Office of Management and
Budget circular A-133 and the Department's implementing regulations at
part 3052 of this title. State agencies must establish audit policy for
for-profit institutions. However, the audit policy established by the
State agency must not conflict with the authority of the State agency or
the Department to perform, or cause to be performed, audits, reviews,
agreed-upon procedures engagements, or other monitoring activities.
(b) The funds provided to the State agency under Sec. 226.4(h) may
be made available to institutions to fund a portion of organization-wide
audits made
[[Page 206]]
in accordance with part 3052 of this title. The funds provided to an
institution for an organization-wide audit must be determined in
accordance with Sec. 3052.230(a) of this title.
(c) Funds provided under Sec. 226.4(h) may be used by the State
agency to conduct program-specific audits of institutions not subject to
organization-wide audits, or for which the State agency considers
program specific audits to be needed. The State agency may use any funds
remaining after all required program-specific audits have been performed
to conduct administrative reviews or agreed-upon procedures engagements
of institutions.
(d) Funds provided under Sec. 226.4(h) may only be obligated during
the fiscal year for which those funds are allocated. If funds provided
under Sec. 226.4(h) are not sufficient to meet the requirements of this
section, the State agency may then use available State administrative
expense funds to conduct audits, provided that the State agency is
arranging for the audits and has not passed the responsibility down to
the institution.
(e) In conducting management evaluations or audits for any fiscal
year, FNS or OIG may disregard any overpayment which does not exceed
$100. In conducting State agency sponsored audits in State administered
programs, the State agency may disregard any overpayment which does not
exceed the amount established by State law, regulations or procedures as
a minimum for which claims will be made for State losses generally. No
overpayment shall be disregarded, however, where there are unpaid claims
of the same fiscal year from which the overpayment can be deducted, or
where there is evidence of violation of criminal law or civil fraud
statutes.
(f) While OIG shall rely to the fullest extent feasible upon State
sponsored audits, OIG may, whenever it considers necessary:
(1) Make audits on a statewide basis;
(2) Perform on-site test audits;
(3) Review audit reports and related working papers of audits
performed by or for State agencies.
(g) State agencies are not required to provide a hearing to an
institution for State actions taken on the basis of a Federal audit
determination. If a State agency does not provide a hearing in such
situations, FNS will provide a hearing, upon request, in accordance with
procedures set forth in Sec. 226.6(k).
[47 FR 36527, Aug. 20, 1982, as amended at 50 FR 8580, Mar. 4, 1985; 51
FR 4295, Feb. 4, 1986; 52 FR 5526, Feb. 25, 1987; 53 FR 52590, Dec. 28,
1988; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 67 FR 43490, June 27, 2002;
69 FR 53543, Sept. 1, 2004; 70 FR 43261, July 27, 2005]
Subpart D_Payment Provisions
Sec. 226.9 Assignment of rates of reimbursement for centers.
(a) The State agency shall assign rates of reimbursement, not less
frequently than annually, on the basis of family-size and income
information reported by each institution. Assigned rates of
reimbursement may be changed more frequently than annually if warranted
by changes in family-size and income information. Assigned rates of
reimbursement shall be adjusted annually to reflect changes in the
national average payment rates.
(b) The State agency shall either:
(1) Require that institutions submit each month's figures for meals
served daily to participants from families meeting the eligibility
standards for free meals, to participants from families meeting the
eligibility standards for reduced-price meals, and to participants from
families not meeting such guidelines; or
(2) Establish claiming percentages, not less frequently that
annually, for each institution on the basis of the number of enrolled
participants eligible for free, reduced-price, and paid meals; or
(3) Determine a blended per-meal rate of reimbursement, not less
frequently than annually, by adding the products obtained by multiplying
the applicable national average payment rate of reimbursement for each
category (free, reduced-price, paid) by the claiming percentage for that
category.
(c) States have two methods of reimbursing institutions. The method
chosen by the State agency must be applied to all institutions
participating in the Program in that State. These methods are:
[[Page 207]]
(1) Meals times rates payment, which involves reimbursing an
institution for meals served at the assigned rate for each meal. This
method entails no comparison to the costs incurred by the institution
for the meal service; and,
(2) Meals times rates or actual costs, whichever is the lesser,
which involves reimbursing an institution for meals served at the
assigned rate for each meal or at the level of the costs actually
incurred by the institution for the meal service. This method does
entail a comparison of the costs incurred to the meal rates, with the
costs being a limiting factor on the level of reimbursement an
institution may receive.
(d) In those States where the State agency has chosen the option to
implement a meals times rates payment system State-wide, the State
agency may elect to pay an institution's final claim for reimbursement
for the fiscal year at higher reassigned rates of reimbursement for
lunches and suppers; however, the reassigned rates may not exceed the
applicable maximum rates of reimbursement established under Sec.
210.11(b) of the National School Lunch Program regulations. In those
States which use the method of comparing meals times rates or actual
costs, whichever is lesser, the total payments made to an institution
shall not exceed the total net costs incurred for the fiscal year.
[47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 53
FR 52590, Dec. 28, 1988; Amdt. 22, 55 FR 1378, Jan. 14, 1990]
Sec. 226.10 Program payment procedures.
(a) If a State agency elects to issue advance payments to all or
some of the participating institutions in the State, it must provide
such advances no later than the first day of each month to those
eligible institutions electing to receive advances in accordance with
Sec. 226.6 (f)(3)(vi). Advance payments shall equal the full level of
claims estimated by the State agency to be submitted in accordance with
paragraph (c) of this section, considering prior reimbursement claims
and other information such as fluctuations in enrollment. The
institution may decline to receive all or any part of the advance.
(b) For each fiscal year, the amount of payment made, including
funds advanced to an institution, shall not exceed the amount of valid
reimbursement claimed by that institution. To ensure that institutions
do not receive excessive advance payments, the State agency shall
observe the following procedures:
(1) After three advance payments have been made to an institution,
the State agency shall ensure that no subsequent advance is made until
the State agency has validated the institution's claim for reimbursement
for the third month prior to the month for which the next advance is to
be paid.
(2) If the State agency has audit or monitoring evidence of
extensive program deficiencies or other reasons to believe that an
institution will not be able to submit a valid claim for reimbursement,
advance payments shall be withheld until the claim is received or the
deficiencies are corrected.
(3) Each month the State agency shall compare incoming claims
against advances to ensure that the level of funds authorized under
paragraph (a) of this section does not exceed the claims for
reimbursement received from the institution. Whenever this process
indicates that excessive advances have been authorized, the State agency
shall either demand full repayment or adjust subsequent payments,
including advances.
(4) If, as a result of year end reconciliation as required by the
Department's Uniform Federal Assistance Regulations (7 CFR part 3015),
the State agency determines that reimbursement earned by an institution
during a fiscal year is less than the amount paid, including funds
advanced to that institution, the State agency shall demand repayment of
the outstanding balance or adjust subsequent payments.
(c) Claims for Reimbursement shall report information in accordance
with the financial management system established by the State agency,
and in sufficient detail to justify the reimbursement claimed and to
enable the State agency to provide the final Report of the Child and
Adult Care Food Program (FNS 44) required under
[[Page 208]]
Sec. 226.7(d). In submitting a Claim for Reimbursement, each
institution shall certify that the claim is correct and that records are
available to support that claim. For each month in which independent
for-profit child care centers and independent for-profit outside-school-
hours care centers claim reimbursement, they must submit the number and
percentage of children in care (enrolled or licensed capacity, whichever
is less) that documents at least 25 percent are eligible for free or
reduced-price meals or are title XX beneficiaries. Sponsoring
organizations of for-profit child care centers or for-profit outside-
school-hours care centers must submit the number and percentage of
children in care (enrolled or licensed capacity, whichever is less) that
documents that at least 25 percent are eligible for free or reduced-
price meals or are title XX beneficiaries. Sponsoring organizations of
such centers must not submit a claim for any for-profit center in which
less than 25 percent of the children in care (enrolled or licensed
capacity, whichever is less) during the claim month were eligible for
free or reduced-price meals or were title XX beneficiaries. Independent
for-profit adult day care centers shall submit the percentages of
enrolled adult participants receiving title XIX or title XX benefits for
the month claimed for months in which not less than 25 percent of
enrolled adult participants were title XIX or title XX beneficiaries.
Sponsoring organizations of such adult day care centers shall submit the
percentage of enrolled adult participants receiving title XIX or title
XX benefits for each center for the claim. Sponsoring organizations of
such centers shall not submit claims for adult day care centers in which
less than 25 percent of enrolled adult participants were title XIX or
title XX beneficiaries for the month claimed. Prior to submitting its
consolidated monthly claim to the State agency, each sponsoring
organization must perform edit checks on each facility's meal claim. At
a minimum, the sponsoring organization's edit checks must:
(1) Verify that each facility has been approved to serve the types
of meals claimed;
(2) Compare the number of children enrolled for care at each
facility, multiplied by the number of days on which the facility is
approved to serve meals, to the total number of meals claimed by the
facility for that month. Discrepancies between the facility's meal claim
and its enrollment must be subjected to more thorough review to
determine if the claim is accurate; and
(3) Detect block claiming (as defined in Sec. 226.2) by any
facility. If block claiming is detected, the sponsoring organization
must not include that facility among those facilities receiving less
than three reviews during the current year, in accordance with Sec.
226.16(d)(4), and must ensure that any facility submitting a block claim
receives an unannounced review within 60 days of the discovery of the
block claim. If, in the course of conducting this review, the sponsoring
organization determines that there is a logical explanation for the
facility to regularly submit a block claim, the sponsoring organization
must note this in the facility's review file and is not required to
conduct an unannounced visit after other block claims detected during
the current year. In addition, if a State agency determines that the
conduct of all required unannounced reviews within 60 days will impose
unwarranted burdens on a particular sponsoring organization, the State
agency may provide that sponsoring organization with up to 30 additional
days to complete the required unannounced reviews.
(d) All records to support the claim shall be retained for a period
of three years after the date of submission of the final claim for the
fiscal year to which they pertain, except that if audit findings have
not been resolved, the records shall be retained beyond the end of the
three year period as long as may be required for the resolution of the
issues raised by the audit. All accounts and records pertaining to the
Program shall be made available, upon request, to representatives of the
State agency, of the Department, and of the U.S. General Accounting
Office for audit or review, at a reasonable time and place.
(e) Unless otherwise approved by FNS, the Claim for Reimbursement
for
[[Page 209]]
any month shall cover only Program operations for that month except if
the first or last month of Program operations in any fiscal year
contains 10 operating days or less, such month may be added to the Claim
for Reimbursement for the appropriate adjacent month; however, Claims
for Reimbursement may not combine operations occurring in two fiscal
years. A final Claim for Reimbursement shall be postmarked and/or
submitted to the State agency not later than 60 days following the last
day of the full month covered by the claim. State agencies may establish
shorter deadlines at their discretion. Claims not postmarked and/or
submitted within 60 days shall not be paid with Program funds unless FNS
determines that an exception should be granted. The State agency shall
promptly take corrective action with respect to any Claim for
Reimbursement as determined necessary through its claim review process
or otherwise. In taking such corrective action, State agencies may make
upward adjustments in Program funds claimed on claims filed within the
60 day deadline if such adjustments are completed within 90 days of the
last day of the claim month and are reflected in the final Report of the
Child and Adult Care Food Programs (FNS-44) for the claim month which is
required under 226.7(d). Upward adjustments in Program funds claimed
which are not reflected in the final FNS-44 for the claim month shall
not be made unless authorized by FNS. Downward adjustments in Program
funds claimed shall always be made without FNS authorization regardless
of when it is determined that such adjustments are necessary.
(f) If, based on the results of audits, investigations, or other
reviews, a State agency has reason to believe that an institution, child
or adult care facility, or food service management company has engaged
in unlawful acts with respect to Program operations, the evidence found
in audits, investigations, or other reviews is a basis for non-payment
of claims for reimbursement.
[47 FR 36527, Aug. 20, 1982, as amended by Amdt. 5, 49 FR 18988, May 4,
1984; 50 FR 26975, July 1, 1985; 53 FR 52590, Dec. 28, 1988; Amdt. 22,
55 FR 1378, Jan. 14, 1990; 62 FR 23618, May 1, 1997; 69 FR 53543, Sept.
1, 2004; 70 FR 43261, July 27, 2005]
Sec. 226.11 Program payments for centers.
(a) Payments shall be made only to institutions operating under an
agreement with the State agency for the meal types specified in the
agreement served at approved child care centers, adult day care centers
and outside-school-hours care centers. A State agency may develop a
policy under which centers are reimbursed for meals served in accordance
with provisions of the Program in the calendar month preceding the
calendar month in which the agreement is executed, or the State agency
may develop a policy under which centers earn reimbursement only for
meals served in approved centers on or after the effective date of the
Program agreement. If the State agency's policy permits centers to earn
reimbursement for meals served prior to the execution of a Program
agreement, Program reimbursement must not be received by the center
until the agreement is executed.
(b) Each child care institution or outside-school-hours care
institution must report each month to the State agency the total number
of meals, by type (breakfast, lunch, supper, and snack), served to
children, except that such reports must be made for a for-profit center
only for calendar months during which not less than 25 percent of the
children in care (enrolled or licensed capacity, whichever is less) were
eligible for free or reduced price meals or were title XX beneficiaries.
Each adult day care institution shall report each month to the State
agency the total number of meals, by type (breakfasts, lunches, suppers,
and supplements), served to adult participants, except that such reports
shall be made for a for-profit center only for calendar months during
which no less than 25 percent of enrolled adult participants
[[Page 210]]
were title XIX or title XX beneficiaries. Prior to submitting its
consolidated monthly claim to the State agency, each sponsoring
organization must conduct reasonable edit checks on the sponsored
centers' meal claims which, at a minimum, include those edit checks
specified at Sec. 226.10(c).
(c) Each State agency must base reimbursement to each child care
institution or outside-school-hours institution on the number of meals,
by type (breakfast, lunch, supper, and snack), served to children
multiplied by the assigned rates of reimbursement, except that
reimbursement must be payable to for-profit child care centers or for-
profit outside-school-hours care centers only for calendar month during
which at least 25 percent of children in care (enrolled or licensed
capacity, whichever is less) were eligible for free or reduced price
meals or were title XX beneficiaries. Each State agency must base
reimbursement to each adult day care institution on the number of meals,
by type, served to adult participants multiplied by the assigned rates
of reimbursement, except that reimbursement must be payable to for-
profit adult day care centers only for calendar months during which at
least 25 percent of the enrolled adult participants were beneficiaries
of title XIX, title XX, or a combination of titles XIX and XX. In
computing reimbursement, the State agency must either:
(1) Base reimbursement to child care centers and adult day care
centers on actual time of service meal counts, and multiply the number
of meals, by type, served to participants eligible to receive free
meals, served to participants eligible to receive reduced-price meals,
and served to participants from families not meeting such standards by
the applicable national average payment rate; or
(2) Apply the applicable claiming percentage or percentages to the
total number of meals, by type, served to participants and multiply the
product or products by the assigned rate of reimbursement for each meal
type; or
(3) Multiply the assigned blended per meal rate of reimbursement by
the total number of meals, by type, served to participants.
(d) If the State agency elects to reimburse its institutions
according to the lesser of rates or actual costs, total Program payments
to an institution during any fiscal year, including any cash payments in
lieu of commodities, shall not exceed allowable Program operating and
administrative costs, less income to the Program. The State agency may
limit payments for administrative costs to the amount approved in the
annual administrative budget of the institution. The State agency may
prohibit an institution from using payments for operating costs to pay
for administrative expenses.
(e) Each institution shall maintain records as prescribed by the
State agency's financial management system.
[47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 52
FR 36907, Oct. 2, 1987; 53 FR 52590, Dec. 28, 1988; 62 FR 23618, May 1,
1997; 69 FR 53543, Sept. 1, 2004; 70 FR 43262, July 27, 2005]
Sec. 226.12 Administrative payments to sponsoring organizations for
day care homes.
(a) General. Sponsoring organizations for day care homes shall
receive payments for administrative costs. During any fiscal year,
administrative costs payments to a sponsoring organization may not
exceed the lesser of (1) actual expenditures for the costs of
administering the Program less income to the Program, or (2) the amount
of administrative costs approved by the State agency in the sponsoring
organization's budget, or (3) the sum of the products obtained by
multiplying each month the sponsoring organization's:
(i) Initial 50 day care homes by 42 dollars;
(ii) Next 150 day care homes by 32 dollars;
(iii) Next 800 day care homes by 25 dollars; and
(iv) Additional day care homes by 22 dollars.
During any fiscal year, administrative payments to a sponsoring
organization may not exceed 30 percent of the total amount of
administrative payments and food service payments for day care home
operations.
[[Page 211]]
(b) Start-up and expansion payments. (1) Prospective sponsoring
organizations of day care homes, participating sponsoring organizations
of child care centers or outside-school-hours care centers, independent
centers, and participating sponsoring organizations of less than 50
homes which meet the criteria in paragraph (b)(2) of this section shall
be entitled to receive start-up payments to develop or expand successful
Program operations in day care homes. Participating sponsoring
organizations of day care homes which meet the criteria in paragraph
(b)(2) of this section shall be entitled to receive expansion payments
to initiate or expand Program operations in day care homes in low-income
or rural areas. The State agency shall approve start-up payments only
once for any eligible sponsoring organization, but may approve expansion
payments for any eligible sponsoring organization more than once,
provided that: the request must be for expansion into an area(s) other
than that specified in their initial or prior request; and 12 months has
elapsed since the sponsoring organization has satisfied all obligations
under its initial or prior expansion agreement. Eligible sponsoring
organizations which have received start-up payments shall be eligible to
apply for expansion payments at a date no earlier than 12 months after
it has satisfied all its obligations under its start-up agreement with
the State agency.
(2) Sponsoring organizations which apply for start-up or expansion
payments shall evidence:
(i) Public status or tax exempt status under the Internal Revenue
Code of 1986;
(ii) An organizational history of managing funds and ongoing
activities (i.e., administering public or private programs);
(iii) An acceptable and realistic plan for recruiting day care homes
to participate in the Program (such as the method of contacting
providers), which may be based on estimates of the number of day care
homes to be recruited and information supporting their existence, and in
the case of sponsoring organizations applying for expansion payments,
documentation that the day care homes to be recruited are located in
low-income or rural areas; and
(iv) An acceptable preliminary sponsoring organization management
plan including, but not limited to, plans for preoperational visits and
training.
(3) The State agency shall deny start-up and expansion payments to
applicant sponsoring organizations which fail to meet the criteria of
paragraph (b)(2) of this section or which have not been financially
responsible in the operation of other programs funded by Federal, State,
or local governments. The State agency shall notify the sponsoring
organization of the reasons for denial and allow the sponsoring
organization full opportunity to submit evidence on appeal as provided
for in Sec. 226.6(k). Any sponsoring organization applying for start-up
or expansion funds shall be notified of approval or disapproval by the
State agency in writing within 30 calendar days of filing a complete and
correct application. If a sponsoring organization submits an incomplete
application, the State agency shall notify the sponsoring organization
within 15 calendar days of receipt of the application and shall provide
technical assistance, if necessary, to the sponsoring organization for
the purpose of completing its application.
(4) Sponsoring organizations which apply for and meet the criteria
for start-up or expansion payments shall enter into an agreement with
the State agency. The agreement shall specify:
(i) Activities which the sponsoring organization will undertake to
initiate or expand Program operations in day care homes;
(ii) The amount of start-up or expansion payments to be issued to
the sponsoring organization, together with an administrative budget
detailing the costs which the sponsoring organization shall incur,
document, and claim;
(iii) The time allotted to the sponsoring organization for the
initiation or expansion of Program operations in family day care homes;
(iv) The responsibility of the applicant sponsoring organization to
repay, upon demand by the State agency, start-up or expansion payments
not expended in accordance with the agreement.
[[Page 212]]
(5) Upon execution of the agreement, the State agency shall issue a
start-up or expansion payment to the sponsoring organization in an
amount equal to not less than one, but not more than two month's
anticipated administrative reimbursement to the sponsoring organization
as determined by the State agency. However, no sponsoring organization
may receive start-up or expansion payments for more than 50 day care
homes. Eligible sponsoring organizations with fewer than 50 homes under
their jurisdiction at the time of application for start-up payments may
receive such payments for up to 50 homes, less the number of homes under
their jurisdiction. Eligible sponsoring organizations applying for
expansion funds may receive at a maximum such payments for up to 50
homes at the currently assigned administrative payment for the first 50
homes. In determining the amount of start-up or expansion payments to be
made to a sponsoring organization, the State agency shall consider the
anticipated level of start-up or expansion costs to be incurred by the
sponsoring organization and alternate sources of funds available to the
sponsoring organization.
(6) Upon expiration of the time allotted to the sponsoring
organization for initiating or expanding Program operations in day care
homes, the State agency shall obtain and review documentation of
activities performed and costs incurred by the sponsoring organization
under the terms of the start-up or expansion agreement. If the
sponsoring organization has not made every reasonable effort to carry
out the activities specified in the agreement, the State agency shall
demand repayment of all or part of the payment. The sponsoring
organization may retain start-up or expansion payments for all day care
homes which initiate Program operations. However, no sponsoring
organization may retain any start-up or expansion payments in excess of
its actual costs for the expenditures specified in the agreement.
[47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at
53 FR 52590, Dec. 28, 1988; 63 FR 9728, Feb. 26, 1998; 67 FR 43490, June
27, 2002]
Sec. 226.13 Food service payments to sponsoring organizations for day
care homes.
(a) Payments shall be made only to sponsoring organizations
operating under an agreement with the State agency for the meal types
specified in the agreement served to enrolled nonresident children and
eligible enrolled children of day care home providers, at approved day
care homes.
(b) Each sponsoring organization shall report each month to the
State agency the total number of meals, by type (breakfasts, lunches,
suppers, and supplements) and by category (tier I and tier II), served
to children enrolled in approved day care homes. Prior to submitting its
consolidated monthly claim to the State agency, each sponsoring
organization must conduct reasonable edit checks on the day care homes'
meal claims which, at a minimum, include those edit checks specified at
Sec. 226.10(c).
(c) Each sponsoring organization shall receive payment for meals
served to children enrolled in approved day care homes at the tier I and
tier II reimbursement rates, as applicable based on daily meal counts
taken in the home, and as established by law and adjusted in accordance
with Sec. 226.4. However, the rates for lunches and suppers shall be
reduced by the value of commodities established under Sec. 226.5(b) for
all sponsoring organizations for day care homes which have elected to
receive commodities. For tier I day care homes, the full amount of food
service payments shall be disbursed to each day care home on the basis
of the number of meals served, by type, to enrolled children. For tier
II day care homes, the full amount of food service payments shall be
disbursed to each day care home on the basis of the number of meals
served to enrolled children by type, and by category (tier I and tier
II) as determined in accordance with paragraphs (d)(2) and (d)(3) of
this section. However, the sponsoring organization may withhold from
Program payments to each home an amount equal to costs incurred for the
provision of Program foodstuffs or meals by the sponsoring organization
on behalf of the home and with the home provider's written consent.
[[Page 213]]
(d) As applicable, each sponsoring organization for day care homes
shall:
(1) Require that tier I day care homes submit the number of meals
served, by type, to enrolled children.
(2) Require that tier II day care homes in which the provider elects
not to have the sponsoring organization identify enrolled children who
are eligible for free or reduced price meals submit the number of meals
served, by type, to enrolled children.
(3) Not more frequently than annually, select one of the methods
described in paragraphs (d)(3) (i)-(iii) of this section for all tier II
day care homes in which the provider elects to have the sponsoring
organization identify enrolled children who are eligible for free or
reduced price meals. In such homes, the sponsoring organization shall
either:
(i) Require that such day care homes submit the number and types of
meals served each day to each enrolled child by name. The sponsoring
organization shall use the information submitted by the homes to produce
an actual count, by type and by category (tier I and tier II), of meals
served in the homes; or
(ii) Establish claiming percentages, not less frequently than
semiannually, for each such day care home on the basis of one month's
data concerning the number of enrolled children determined eligible for
free or reduced-price meals. Sponsoring organizations shall obtain one
month's data by collecting either enrollment lists (which show the name
of each enrolled child in the day care home), or attendance lists (which
show, by days or meals, the rate of participation of each enrolled child
in the day care home). The State agency may require a sponsoring
organization to recalculate the claiming percentage for any of its day
care homes before the required semiannual calculation if the State
agency has reason to believe that a home's percentage of income-eligible
children has changed significantly or was incorrectly established in the
previous calculation. Under this system, day care homes shall be
required to submit the number of meals served, by type, to enrolled
children; or
(iii) Determine a blended per-meal rate of reimbursement, not less
frequently than semiannually, for each such day care home by adding the
products obtained by multiplying the applicable rates of reimbursement
for each category (tier I and tier II) by the claiming percentage for
that category, as established in accordance with paragraph (d)(3)(ii) of
this section. The State agency may require a sponsoring organization to
recalculate the blended rate for any of its day care homes before the
required semiannual calculation if the State agency has reason to
believe that a home's percentage of income-eligible children has changed
significantly or was incorrectly established in the previous
calculation. Under this system, day care homes shall be required to
submit the number of meals served, by type, to enrolled children.
[47 FR 36527, Aug. 20, 1982, as amended at 62 FR 903, Jan. 7, 1997; 62
FR 5519, Feb. 6, 1997; 63 FR 9105, Feb. 24, 1998; 69 FR 53544, Sept. 1,
2004]
Sec. 226.14 Claims against institutions.
(a) State agencies shall disallow any portion of a claim for
reimbursement and recover any payment to an institution not properly
payable under this part. State agencies may consider claims for
reimbursement not properly payable if an institution does not comply
with the recordkeeping requirements contained in this part. The State
agency may permit institutions to pay overclaims over a period of one or
more years. However, the State agency must assess interest beginning
with the initial demand for remittance. Further, when an institution
requests and is granted an administrative review of the State agency's
overpayment demand, the State agency is prohibited from taking action to
collect or offset the overpayment until the administrative review is
concluded. The State agency must maintain searchable records of funds
recovery activities. If the State agency determines that a sponsoring
organization of centers has spent more than 15 percent of its meal
reimbursements for a budget year for administrative costs (or more than
any higher limit established pursuant to a waiver granted under Sec.
226.7(g)), the State agency must take appropriate fiscal action. In
addition,
[[Page 214]]
except with approval from the appropriate FNSRO, State agencies shall
consider claims for reimbursement not payable when an institution fails
to comply with the recordkeeping requirements that pertain to records
directly supporting claims for reimbursement. Records that directly
support claims for reimbursement include, but are not limited to, daily
meal counts, menu records, and enrollment and attendance records, as
required by Sec. 226.15(e). State agencies shall assert overclaims
against any sponsoring organization of day care homes which
misclassifies a day care home as a tier I day care home unless the
misclassification is determined to be inadvertent under guidance issued
by FNS. However, the State agency shall notify the institution of the
reasons for any disallowance or demand for repayment, and allow the
institution full opportunity to submit evidence on appeal as provided
for in Sec. 226.6(k). Miminum State agency collection procedures for
unearned payments shall include:
(1) Written demand to the institution for the return of improper
payments; (2) if, after 30 calendar days, the institution fails to remit
full payment or agree to a satisfactory repayment schedule, a second
written demand for the return of improper payments sent by certified
mail return receipt requested; and (3) if, after 60 calendar days, the
institution fails to remit full payment or agree to a satisfactory
repayment schedule, the State agency shall refer the claim against the
institution to appropriate State or Federal authorities for pursuit of
legal remedies.
(b) In the event that the State agency finds that an institution
which prepares its own meals is failing to meet the meal requirements of
Sec. 226.20, the State agency need not disallow payment or collect an
overpayment arising out of such failure if the institution takes such
other action as, in the opinion of the State agency, will have a
corrective effect. However, the State agency shall not disregard any
overpayments or waive collection action arising from the findings of
Federal audits.
(c) If FNS does not concur with the State agency's action in paying
an institution or in failing to collect an overpayment, FNS shall notify
the State agency of its intention to assert a claim against the State
agency. In all such cases, the State agency shall have full opportunity
to submit evidence concerning the action taken. The State agency shall
be liable to FNS for failure to collect an overpayment, unless FNS
determines that the State agency has conformed with this part in issuing
the payment and has exerted reasonable efforts to recover the improper
payment.
[47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at
50 FR 8580, Mar. 4, 1985; 53 FR 52590, Dec. 28, 1988; 62 FR 903, Jan. 7,
1997; 64 FR 72260, Dec. 27, 1999; 67 FR 43490, June 27, 2002; 69 FR
53544, Sept. 1, 2004]
Subpart E_Operational Provisions
Sec. 226.15 Institution provisions.
(a) Tax exempt status. Except for for-profit centers and sponsoring
organizations of such centers, institutions must be public, or have tax
exempt status under the Internal Revenue Code of 1986.
(b) New applications and renewals. Each institution must submit to
the State agency with its application all information required for its
approval as set forth in Sec. 226.6(b) and 226.6(f). Such information
must demonstrate that a new institution has the administrative and
financial capability to operate the Program in accordance with this part
and with the performance standards set forth in Sec. 226.6(b)(1)(xvii),
and that a renewing institution has the administrative and financial
capability to operate the Program in accordance with this part and with
the performance standards set forth in Sec. 226.6(b)(2)(vii).
(c) Responsibility. Each institution shall accept final
administrative and financial responsibility for Program operations. No
institution may contract out for management of the Program.
(d) Staffing. Each institution shall provide adequate supervisory
and operational personnel for management and monitoring of the Program.
(e) Recordkeeping. Each institution shall establish procedures to
collect
[[Page 215]]
and maintain all program records required under this part, as well as
any records required by the State agency. Failure to maintain such
records shall be grounds for the denial of reimbursement for meals
served during the period covered by the records in question and for the
denial of reimbursement for costs associated with such records. At a
minimum, the following records shall be collected and maintained:
(1) Copies of all applications and supporting documents submitted to
the State agency;
(2) Documentation of the enrollment of each participant at child
care centers (except for outside-school-hours care centers) and adult
day care centers. All types of centers must maintain information used to
determine eligibility for free or reduced-price meals in accordance with
Sec. 226.23(e)(1). For child care centers, such documentation of
enrollment must be updated annually, signed by a parent or legal
guardian, and include information on each child's normal days and hours
of care and the meals normally received while in care.
(3) Documentation of: The enrollment of each child at day care
homes; information used to determine the eligibility of enrolled
providers' children for free or reduced price meals; information used to
classify day care homes as tier I day care homes, including official
source documentation obtained from school officials when the
classification is based on elementary school data; and information used
to determine the eligibility of enrolled children in tier II day care
homes that have been identified as eligible for free or reduced price
meals in accordance with Sec. 226.23(e)(1). Such documentation of
enrollment must be updated annually, signed by a parent or legal
guardian, and include information on each child's normal days and hours
of care and the meals normally received while in care.
(4) Daily records indicating the number of participants in
attendance and the daily meal counts, by type (breakfast, lunch, supper,
and snacks), served to family day care home participants, or the time of
service meal counts, by type (breakfast, lunch, supper, and snacks),
served to center participants. State agencies may require family day
care homes to record meal counts at the time of meal service only in day
care homes providing care for more than 12 children in a single day, or
in day care homes that have been found seriously deficient due to
problems with their meal counts and claims.
(5) Except at day care homes, daily records indicating the number of
meals, by type, served to adults performing labor necessary to the food
service;
(6) Copies of invoices, receipts, or other records required by the
State agency financial management instruction to document:
(i) Administrative costs claimed by the institution;
(ii) Operating costs claimed by the institution except sponsoring
organizations of day care homes; and
(iii) Income to the Program.
(7) Copies of all claims for reimbursement submitted to the State
agency;
(8) Receipts for all Program payments received from the State
agency;
(9) If applicable, information concerning the dates and amounts of
disbursement to each child care facility or adult day care facility
under its auspices;
(10) Copies of menus, and any other food service records required by
the State agency;
(11) If applicable, information concerning the location and dates of
each child care or adult day care facility review, any problems noted,
and the corrective action prescribed and effected;
(12) Information on training session date(s) and location(s), as
well as topics presented and names of participants; and
(13) Documentation of nonprofit food service to ensure that all
Program reimbursement funds are used: (i) Solely for the conduct of the
food service operation; or (ii) to improve such food service operations,
principally for the benefit of the enrolled participants.
(14) For sponsoring organizations, records documenting the
attendance at training of each staff member with monitoring
responsibilities. Training must include instruction, appropriate to the
level of staff experience and duties, on the Program's meal patterns,
meal counts, claims submission and
[[Page 216]]
claim review procedures, recordkeeping requirements, and an explanation
of the Program's reimbursement system.
(f) Day care home classifications. Each sponsoring organization of
day care homes shall determine which of the day care homes under its
sponsorship are eligible as tier I day care homes. A sponsoring
organization may use current school or census data provided by the State
agency or free and reduced price applications collected from day care
home providers in making a determination for each day care home. When
using elementary school or census data for making tier I day care home
determinations, a sponsoring organization shall first consult school
data, except in cases in which busing or other bases of attendance, such
as magnet or charter schools, result in school data not being
representative of an attendance area's household income levels. In these
cases, census data should generally be consulted instead of school data.
A sponsoring organization may also use census data if, after reasonable
efforts are made, as defined by the State agency, the sponsoring
organization is unable to obtain local elementary school attendance area
information. A sponsoring organization may also consult census data
after having consulted school data which fails to support a tier I day
care home determination for rural areas with geographically large
elementary school attendance areas, for other areas in which an
elementary school's free and reduced price enrollment is above 40
percent, or in other cases with State agency approval. However, if a
sponsoring organization believes that a segment of an otherwise eligible
elementary school attendance area is above the criteria for free or
reduced price meals, then the sponsoring organization shall consult
census data to determine whether the homes in that area qualify as tier
I day care homes based on census data. If census data does not support a
tier I classification, then the sponsoring organization shall reclassify
homes in segments of such areas as tier II day care homes unless the
individual providers can document tier I eligibility on the basis of
their household income. When making tier I day care home determinations
based on school data, a sponsoring organization shall use attendance
area information that it has obtained, or verified with appropriate
school officials to be current, within the last school year.
Determinations of a day care home's eligibility as a tier I day care
home shall be valid for one year if based on a provider's household
income, five years if based on school data, or until more current data
are available if based on census data. However, a sponsoring
organization, State agency, or FNS may change the determination if
information becomes available indicating that a home is no longer in a
qualified area. The State agency shall not routinely require annual
redeterminations of the tiering status of tier I day care homes based on
updated elementary school data.
(g) Payment to employees. No institution that is a sponsoring
organization of family day care homes and that employs more than one
person is permitted to base payment (including bonuses or gratuities) to
its employees, contractors, or family day care home providers solely on
the number of new family day care homes recruited for the sponsoring
organization's Program.
(h) Claims submission. Each institution shall submit claims for
reimbursement to the State agency in accordance with Sec. 226.10.
(i) Program agreement. Each institution shall enter into a Program
agreement with the State agency in accordance with Sec. 226.6(b)(4).
(j) Commodities. Each institution receiving commodities shall ensure
proper commodity utilization.
(k) Special Milk Program. No institution may participate in both the
Child and Adult Care Food Program and the Special Milk Program at the
same time.
(l) Elderly feeding programs. Institutions which are school food
authorities (as defined in part 210 of this chapter) may use facilities,
equipment and personnel supported by funds provided under this part to
support a nonprofit nutrition program for the elderly, including a
program funded under the Older Americans Act of 1965 (42 U.S.C. 3001 et
seq.).
[[Page 217]]
(m) Regulations and guidance. Each institution must comply with all
regulations issued by FNS and the Department, all instructions and
handbooks issued by FNS and the Department to clarify or explain
existing regulations, and all regulations, instructions and handbooks
issued by the State agency that are consistent with the provisions
established in Program regulations.
(n) Information on WIC. Each institution must ensure that parents of
enrolled children are provided with current information on the benefits
and importance of the Special Supplemental Nutrition Program for Women,
Infants, and Children (WIC) and the eligibility requirements for WIC
participation.
[47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 50
FR 8580, Mar. 4, 1985; 52 FR 15298, Apr. 28, 1987; 52 FR 36907, Oct. 2,
1987; 53 FR 52590, Dec. 28, 1988; 54 FR 26724, June 26, 1989; Amdt. 22,
55 FR 1378, Jan. 14, 1990; 56 FR 58174, Nov. 16, 1991; 61 FR 25554, May
22, 1996; 62 FR 903, Jan. 7, 1997; 62 FR 23619, May 1, 1997; 63 FR 9105,
Feb. 24, 1998; 64 FR 72260, Dec. 27, 1999; 67 FR 43490, June 27, 2002;
69 FR 53544, Sept. 1, 2004; 70 FR 8503, Feb. 22, 2005; 70 FR 43262, July
27, 2005]
Sec. 226.16 Sponsoring organization provisions.
(a) Each sponsoring organization shall comply with all provisions of
Sec. 226.15.
(b) Each sponsoring organization must submit to the State agency
with its application all information required for its approval, and the
approval of the facilities under its jurisdiction, as set forth in
Sec. Sec. 226.6(b) and 226.6(f). The application must demonstrate that
the institution has the administrative and financial capability to
operate the Program in accordance with the Program regulations. In
addition to the information required in Sec. Sec. 226.6(b) and
226.6(f), the application must include:
(1) A sponsoring organization management plan and administrative
budget, in accordance with Sec. Sec. 226.6(b)(1)(iv), 226.6(b)(1)(v),
226.6(b)(2)(i), 226.6(f)(2)(ii), and 226.7(g), which includes
information sufficient to document the sponsoring organization's
compliance with the performance standards set forth at Sec.
226.6(b)(1)(xvii) and 226.6(b)(2)(vii). As part of its management plan,
a sponsoring organization of day care homes must document that, to
perform monitoring, it will employ the equivalent of one full-time staff
person for each 50 to 150 day care homes it sponsors. As part of its
management plan, a sponsoring organization of centers must document
that, to perform monitoring, it will employ the equivalent of one full-
time staff person for each 25 to 150 centers it sponsors. It is the
State agency's responsibility to determine the appropriate level of
staffing for monitoring for each sponsoring organization, consistent
with these specified ranges and factors that the State agency will use
to determine the appropriate level of monitoring staff for each sponsor.
The monitoring staff equivalent may include the employee's time spent on
scheduling, travel time, review time, follow-up activity, report
writing, and activities related to the annual updating of children's
enrollment forms. Sponsoring organizations that were participating in
the Program on July 29, 2002, were to have submitted, no later than July
29, 2003, a management plan or plan amendment that meets the monitoring
staffing requirement. For sponsoring organizations of centers, the
portion of the administrative costs to be charged to the Program may not
exceed 15 percent of the meal reimbursements estimated or actually
earned during the budget year, unless the State agency grants a waiver
in accordance with Sec. 226.7(g). A sponsoring organization of centers
must include in the administrative budget all administrative costs,
whether incurred by the sponsoring organization or its sponsored
centers. If at any point a sponsoring organization determines that the
meal reimbursements estimated to be earned during the budget year will
be lower than that estimated in its administrative budget, the
sponsoring organization must amend its administrative budget to stay
within the 15 percent limitation (or any higher limit established
pursuant to a waiver granted under Sec. 226.7(g)) or seek a waiver.
Failure to do so will result in appropriate fiscal action in accordance
with Sec. 226.14(a).
(2) An application for participation, or renewal materials, for each
child
[[Page 218]]
care and adult day care facility accompanied by all necessary supporting
documentation;
(3) Timely information concerning the eligibility status of child
care and adult day care facilities (such as licensing/approval actions);
(4) For sponsoring organizations applying for initial participation
on or after June 20, 2000, if required by State law, regulation, or
policy, a bond in the form prescribed by such law, regulation, or
policy;
(5) A copy of the sponsoring organization's notice to parents, in a
form and, to the maximum extent practicable, language easily
understandable by the participant's parents or guardians. The notice
must inform them of their facility's participation in CACFP, the
Program's benefits, the name and telephone number of the sponsoring
organization, and the name and telephone number of the State agency
responsible for administration of CACFP;
(6) If the sponsoring organization chooses to establish procedures
for determining a day care home seriously deficient that supplement the
procedures in paragraph (l) of this section, a copy of those
supplemental procedures. If the State agency has made the sponsoring
organization responsible for the administrative review of a proposed
termination of a day care home's agreement for cause, pursuant to Sec.
226.6(l)(1), a copy of the sponsoring organization's administrative
review procedures. The sponsoring organization's supplemental serious
deficiency and administrative review procedures must comply with
paragraph (l) of this section and Sec. 226.6(l);
(7) A copy of their outside employment policy. The policy must
restrict other employment by employees that interferes with an
employee's performance of Program-related duties and responsibilities,
including outside employment that constitutes a real or apparent
conflict of interest; and
(8) For sponsoring organizations of day care homes, the name,
mailing address, and date of birth of each provider.
(c) Each sponsoring organization shall accept final administrative
and financial responsibility for food service operations in all child
care and adult day care facilities under its jurisdiction.
(d) Each sponsoring organization must provide adequate supervisory
and operational personnel for the effective management and monitoring of
the program at all facilities it sponsors. Each sponsoring organization
must employ monitoring staff sufficient to meet the requirements of
paragraph (b)(1) of this section. At a minimum, Program assistance must
include:
(1) Pre-approval visits to each child care and adult day care
facility for which application is made to discuss Program benefits and
verify that the proposed food service does not exceed the capability of
the child care facility;
(2) Training on Program duties and responsibilities to key staff
from all sponsored facilities prior to the beginning of Program
operations. At a minimum, such training must include instruction,
appropriate to the level of staff experience and duties, on the
Program's meal patterns, meal counts, claims submission and review
procedures, recordkeeping requirements, and reimbursement system.
Attendance by key staff, as defined by the State agency, is mandatory;
(3) Additional mandatory training sessions for key staff from all
sponsored child care and adult day care facilities not less frequently
than annually. At a minimum, such training must include instruction,
appropriate to the level of staff experience and duties, on the
Program's meal patterns, meal counts, claims submission and review
procedures, recordkeeping requirements, and reimbursement system.
Attendance by key staff, as defined by the State agency, is mandatory;
(4)(i) Review elements. Reviews that assess whether the facility has
corrected problems noted on the previous review(s), a reconciliation of
the facility's meal counts with enrollment and attendance records for a
five-day period, as specified in paragraph (d)(4)(ii) of this section,
and an assessment of the facility's compliance with the Program
requirements pertaining to:
(A) The meal pattern;
(B) Licensing or approval;
(C) Attendance at training;
(D) Meal counts;
[[Page 219]]
(E) Menu and meal records; and
(F) The annual updating and content of enrollment forms (if the
facility is required to have enrollment forms on file, as specified in
Sec. 226.15(e)(2) and 226.15(e)(3)).
(ii) Reconciliation of meal counts. Reviews must examine the meal
counts recorded by the facility for five consecutive days during the
current and/or prior claiming period. For each day examined, reviewers
must use enrollment and/or attendance records to determine the number of
children in care during each meal service and attempt to reconcile those
numbers to the numbers of breakfasts, lunches, suppers, and/or snacks
recorded in the facility's meal count for that day. Based on that
comparison, reviewers must determine whether the meal counts were
accurate. If there is a discrepancy between the number of children
enrolled or in attendance on the day of review and prior meal counting
patterns, the reviewer must attempt to reconcile the difference and
determine whether the establishment of an overclaim is necessary.
(iii) Frequency and type of required facility reviews. Sponsoring
organizations must review each facility three times each year, except as
described in paragraph (d)(4)(iv) of this section. In addition:
(A) At least two of the three reviews must be unannounced;
(B) At least one unannounced review must include observation of a
meal service;
(C) At least one review must be made during each new facility's
first four weeks of Program operations; and
(D) Not more than six months may elapse between reviews.
(iv) Averaging of required reviews. If a sponsoring organization
conducts two unannounced reviews of a facility in a year and finds no
serious deficiencies (as described in paragraph (l)(2) of this section,
regardless of the type of facility), the sponsoring organization may
choose not to conduct a third review of the facility that year, provided
that the sponsoring organization conducts an average of three reviews of
all of its facilities that year. When the sponsoring organization uses
this averaging provision, and a specific facility receives two reviews
in one review year, its first review in the next review year must occur
no more than nine months after the previous review. Sponsoring
organizations may not review a sponsored facility fewer than three times
per year if the facility has submitted a block claim during the year.
(v) Follow-up reviews. If, in conducting a facility review, a
sponsoring organization detects one or more serious deficiency, the next
review of that facility must be unannounced. Serious deficiencies are
those described at paragraph (l)(2) of this section, regardless of the
type of facility.
(vi) Notification of unannounced reviews. Sponsoring organizations
of centers must provide each center with written notification of the
right of the sponsoring organization, the State agency, the Department,
and other State and Federal officials to make announced or unannounced
reviews of its operations during the center's normal hours of operation,
and must also notify sponsored centers that anyone making such reviews
must show photo identification that demonstrates that they are employees
of one of these entities. For sponsored centers participating on July
29, 2002, the sponsoring organization was to have provided this notice
no later than August 29, 2002. For sponsored centers that are approved
after July 29, 2002, the sponsoring organization must provide the notice
before meal service under the Program begins. Sponsoring organizations
must provide day care homes notification of unannounced visits in
accordance with Sec. 226.18(b)(1).
(vii) Other requirements pertaining to unannounced reviews.
Unannounced reviews must be made only during the facility's normal hours
of operation, and monitors making such reviews must show photo
identification that demonstrates that they are employees of the
sponsoring organization, the State agency, the Department, or other
State and Federal agencies authorized to audit or investigate Program
operations.
(viii) Imminent threat to health or safety. Sponsoring organizations
that discover in a facility conduct or conditions that pose an imminent
threat to the health or safety of participating
[[Page 220]]
children or the public, must immediately notify the appropriate State or
local licensing or health authorities and take action that is consistent
with the recommendations and requirements of those authorities.
(5) For sponsoring organizations, as part of their monitoring of
facilities, compliance with the household contact requirements
established pursuant to Sec. 226.6(m)(5) of this part.
(e) Each sponsoring organization shall comply with the recordkeeping
requirements established in Sec. Sec. 226.10(d) and 226.15(e) and any
recordkeeping requirements established by the State agency in order to
justify the administrative payments made in accordance with Sec.
226.12(a). Failure to maintain such records shall be grounds for the
denial of reimbursement.
(f) The State agency may require a sponsoring organization to enter
into separate agreements for the administration of separate types of
facilities (child care centers, day care homes, adult day care centers,
and outside-school-hours care centers).
(g) Each sponsoring organization electing to receive advance
payments of program funds for day care homes shall disburse the full
amount of such payments within five working days of receipt from the
State agency. If the sponsor requests the full operating advance to
which it is entitled, the advances to day care homes shall be the full
amount which the sponsor expects the home to earn based on the number of
meals projected to be served to enrolled children during the period
covered by the advance multiplied by the applicable payment rate as
specified in Sec. 226.13(c). If a sponsor elects to receive only a part
of the operating advance to which it is entitled, or if the full
operating advance is insufficient to provide a full advance to each
home, the advance shall be disbursed to its homes in a manner and an
amount the sponsor deems appropriate. Each sponsor shall disburse any
reimbursement payments for food service due to each day care home within
five working days of receipt from the State agency. Such payment shall
be based on the number of meals served to enrolled children at each day
care home, less any payments advanced to such home. However, the
sponsoring organization may withhold from Program payments to each home
an amount equal to food service operating costs incurred by the
sponsoring organization in behalf of the home and with the home
provider's written consent. If payments from the State agency are not
sufficient to provide all day care homes under the sponsoring
organization's jurisdiction with advance payments and reimbursement
payments, available monies shall be used to provide all due
reimbursement payments before advances are disbursed.
(h) Sponsoring organizations shall make payments of program funds to
child care centers, adult day care centers or outside-school-hours care
centers within five working days of receipt from the State agency, on
the basis of the management plan approved by the State agency, and may
not exceed the Program costs documented at each facility during any
fiscal year; except in those States where the State agency has chosen
the option to implement a meals times rates payment system. In those
States which implement this optional method of reimbursement, such
disbursements may not exceed the rates times the number of meals
documented at each facility during any fiscal year.
(i) Disbursements of advance payments may be withheld from child and
adult day care facilities which fail to submit reports required by Sec.
226.15(e).
(j) A for-profit organization shall be eligible to serve as a
sponsoring organization for for-profit centers which have the same legal
identity as the organization, but shall not be eligible to sponsor for-
profit centers which are legally distinct from the organization, day
care homes, or public or private nonprofit centers.
(k) Before sponsoring organizations expend administrative funds to
assist family day care homes in becoming licensed, they shall obtain the
following information from each such home: a completed free and reduced
price application which documents that the provider meets the Program's
income standards; evidence of its application for licensing and official
documentation of the defects that are impeding its licensing approval;
and a completed
[[Page 221]]
CACFP application. These funding requests are limited to $300 per home
and are only available to each home once.
(l) Termination of agreements for cause--(1) General. The sponsoring
organization must initiate action to terminate the agreement of a day
care home for cause if the sponsoring organization determines the day
care home has committed one or more serious deficiency listed in
paragraph (l)(2) of this section.
(2) List of serious deficiencies for day care homes. Serious
deficiencies for day care homes are:
(i) Submission of false information on the application;
(ii) Submission of false claims for reimbursement;
(iii) Simultaneous participation under more than one sponsoring
organization;
(iv) Non-compliance with the Program meal pattern;
(v) Failure to keep required records;
(vi) Conduct or conditions that threaten the health or safety of a
child(ren) in care, or the public health or safety;
(vii) A determination that the day care home has been convicted of
any activity that occurred during the past seven years and that
indicated a lack of business integrity. A lack of business integrity
includes fraud, antitrust violations, embezzlement, theft, forgery,
bribery, falsification or destruction of records, making false
statements, receiving stolen property, making false claims, obstruction
of justice, or any other activity indicating a lack of business
integrity as defined by the State agency, or the concealment of such a
conviction;
(viii) Failure to participate in training; or
(ix) Any other circumstance related to non-performance under the
sponsoring organization-day care home agreement, as specified by the
sponsoring organization or the State agency.
(3) Serious deficiency notification procedures. If the sponsoring
organization determines that a day care home has committed one or more
serious deficiency listed in paragraph (l)(2) of this section, the
sponsoring organization must use the following procedures to provide the
day care home notice of the serious deficiency(ies) and offer it an
opportunity to take corrective action. However, if the serious
deficiency(ies) constitutes an imminent threat to the health or safety
of participants, or the day care home has engaged in activities that
threaten the public health or safety, the sponsoring organization must
follow the procedures in paragraph (l)(4) of this section instead of
those in this paragraph (l)(3).
(i) Notice of serious deficiency. The sponsoring organization must
notify the day care home that it has been found to be seriously
deficient. The sponsoring organization must provide a copy of the
serious deficiency notice to the State agency. The notice must specify:
(A) The serious deficiency(ies);
(B) The actions to be taken by the day care home to correct the
serious deficiency(ies);
(C) The time allotted to correct the serious deficiency(ies) (as
soon as possible, but not to exceed 30 days);
(D) That the serious deficiency determination is not subject to
administrative review.
(E) That failure to fully and permanently correct the serious
deficiency(ies) within the allotted time will result in the
institution's proposed termination of the day care home's agreement and
the proposed disqualification of the day care home and its principals;
and
(F) That the day care home's voluntary termination of its agreement
with the institution after having been notified that it is seriously
deficient will still result in the day care home's formal termination by
the State institution and placement of the day care home and its
principals on the National disqualified list.
(ii) Successful corrective action. If the day care home corrects the
serious deficiency(ies) within the allotted time and to the sponsoring
organization's satisfaction, the sponsoring organization must notify the
day care home that it has rescinded its determination of serious
deficiency. The sponsoring organization must also provide a copy of the
notice to the State agency.
(iii) Proposed termination of agreement and proposed
disqualification. If timely
[[Page 222]]
corrective action is not taken to fully and permanently correct the
serious deficiency(ies) cited, the sponsoring organization must issue a
notice proposing to terminate the day care home's agreement for cause.
The notice must explain the day care home's opportunity for an
administrative review of the proposed termination in accordance with
Sec. 226.6(l). The sponsoring organization must provide a copy of the
notice to the State agency. The notice must:
(A) Inform the day care home that it may continue to participate and
receive Program reimbursement for eligible meals served until its
administrative review is concluded;
(B) Inform the day care home that termination of the day care home's
agreement will result in the day care home's termination for cause and
disqualification; and
(C) State that if the day care home seeks to voluntarily terminate
its agreement after receiving the notice of intent to terminate, the day
care home will still be placed on the National disqualified list.
(iv) Program payments. The sponsoring organization must continue to
pay any claims for reimbursement for eligible meals served until the
serious deficiency(ies) is corrected or the day care home's agreement is
terminated, including the period of any administrative review.
(v) Agreement termination and disqualification. The sponsoring
organization must immediately terminate the day care home's agreement
and disqualify the day care home when the administrative review official
upholds the sponsoring organization's proposed termination and proposed
disqualification, or when the day care home's opportunity to request an
administrative review expires. At the same time the notice is issued,
the sponsoring organization must provide a copy of the termination and
disqualification letter to the State agency.
(4) Suspension of participation for day care homes.
(i) General. If State or local health or licensing officials have
cited a day care home for serious health or safety violations, the
sponsoring organization must immediately suspend the home's CACFP
participation prior to any formal action to revoke the home's licensure
or approval. If the sponsoring organization determines that there is an
imminent threat to the health or safety of participants at a day care
home, or that the day care home has engaged in activities that threaten
the public health or safety, and the licensing agency cannot make an
immediate onsite visit, the sponsoring organization must immediately
notify the appropriate State or local licensing and health authorities
and take action that is consistent with the recommendations and
requirements of those authorities. An imminent threat to the health or
safety of participants and engaging in activities that threaten the
public health or safety constitute serious deficiencies; however, the
sponsoring organization must use the procedures in this paragraph (l)(4)
(and not the procedures in paragraph (l)(3) of this section) to provide
the day care home notice of the suspension of participation, serious
deficiency, and proposed termination of the day care home's agreement.
(ii) Notice of suspension, serious deficiency, and proposed
termination. The sponsoring organization must notify the day care home
that its participation has been suspended, that the day care home has
been determined seriously deficient, and that the sponsoring
organization proposes to terminate the day care home's agreement for
cause, and must provide a copy of the notice to the State agency. The
notice must:
(A) Specify the serious deficiency(ies) found and the day care
home's opportunity for an administrative review of the proposed
termination in accordance with Sec. 226.6(l);
(B) State that participation (including all Program payments) will
remain suspended until the administrative review is concluded;
(C) Inform the day care home that if the administrative review
official overturns the suspension, the day care home may claim
reimbursement for eligible meals served during the suspension;
(D) Inform the day care home that termination of the day care home's
agreement will result in the placement
[[Page 223]]
of the day care home on the National disqualified list; and
(E) State that if the day care home seeks to voluntarily terminate
its agreement after receiving the notice of proposed termination, the
day care home will still be terminated for cause and disqualified.
(iii) Agreement termination and disqualification. The sponsoring
organization must immediately terminate the day care home's agreement
and disqualify the day care home when the administrative review official
upholds the sponsoring organization's proposed termination, or when the
day care home's opportunity to request an administrative review expires.
(iv) Program payments. A sponsoring organization is prohibited from
making any Program payments to a day care home that has been suspended
until any administrative review of the proposed termination is
completed. If the suspended day care home prevails in the administrative
review of the proposed termination, the sponsoring organization must
reimburse the day care home for eligible meals served during the
suspension period.
(m) Sponsoring organizations of family day care homes must not make
payments to employees or contractors solely on the basis of the number
of homes recruited. However, such employees or contractors may be paid
or evaluated on the basis of recruitment activities accomplished.
[47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at
48 FR 21530, May 13, 1983; 50 FR 8580, Mar. 4, 1985; 50 FR 26975, July
1, 1985; 53 FR 52591, Dec. 28, 1988; 63 FR 9729, Feb. 26, 1998; 64 FR
72260, Dec. 27, 1999; 67 FR 43490, June 27, 2002; 69 FR 53544, Sept. 1,
2004]
Sec. 226.17 Child care center provisions.
(a) Child care centers may participate in the Program either as
independent centers or under the auspices of a sponsoring organization;
provided, however, that public and private nonprofit centers shall not
be eligible to participate in the Program under the auspices of a for-
profit sponsoring organization. Child care centers participating as
independent centers shall comply with the provisions of Sec. 226.15.
(b) All child care centers, independent or sponsored, shall meet the
following requirements
(1) Child care centers shall have Federal, State, or local licensing
or approval to provide day care services to children. Child care centers
which are complying with applicable procedures to renew licensing or
approval may participate in the Program during the renewal process,
unless the State agency has information which indicates that renewal
will be denied. If licensing or approval is not available, a center may
participate if:
(i) It receives title XX funds for child care; or
(ii) It demonstrates compliance with the CACFP child care standards
or any applicable State or local child care standards to the State
agency.
(2) Except for for-profit centers, child care centers shall be
public, or have tax exempt status under the Internal Revenue Code of
1986.
(3) Each child care center participating in the Program shall serve
one or more of the following meal types: (i) Breakfast, (ii) lunch,
(iii) supper, and (iv) supplemental food. Reimbursement shall not be
claimed for more than two meals and one supplement provided daily to
each child.
(4) Each child care center participating in the Program shall claim
only the meal types specified in its approved application in accordance
with the meal pattern requirements specified in Sec. 226.20. For-profit
child care centers may not claim reimbursement for meals served to
children in any month in which less than 25 percent of the children in
care (enrolled or licensed capacity, whichever is less) were eligible
for free or reduced price meals or were title XX beneficiaries. Menus
and any other nutritional rec ords required by the State agency shall be
maintained to document compliance with such requirements.
(5) A child care center with pre-school children may also be
approved to serve a breakfast, supplement, and supper to school-age
children enrolled in an outside-school-hours care program meeting the
criteria of Sec. 226.19(b) which is distinct from its day care program
for preschool-age children. The State agency may authorize the service
[[Page 224]]
of lunch to such enrolled children who attend a school which does not
offer a lunch program provided the limit of not more than two meals and
one supplement per child per day is not exceeded. If the majority of
children served by the center are participating in an outside-school-
hours care program, the center shall comply with reporting requirements
of Sec. 226.19 and, if it is a facility, shall be monitored by the
sponsoring organization at the frequency specified in Sec.
226.16(d)(4)(iii).
(6) A child care center may utilize existing school food service
facilities or obtain meals from a school food service facility, and the
pertinent requirements of this part shall be embodied in a written
agreement between the child care center and school. The center shall
maintain responsibility for all Program requirements set forth in this
part.
(7) Child care centers shall collect and maintain documentation of
the enrollment of each child, including information used to determine
eligibility for free and reduced price meals in accordance with Sec.
226.23(e)(1). In addition, Head Start participants need only have a Head
Start statement of income eligibility, or a statement of Head Start
enrollment from an authorized Head Start representative, to be eligible
for free meal benefits under the CACFP. Such documentation of enrollment
must be updated annually, signed by a parent or legal guardian, and
include information on each child's normal days and hours of care and
the meals normally received while in care.
(8) Each child care center must maintain daily records of time of
service meal counts by type (breakfast, lunch, supper, and snacks)
served to enrolled children, and to adults performing labor necessary to
the food service.
(9) Each child care center must require key staff, as defined by the
State agency, to attend Program training prior to the center's
participation in the Program, and at least annually thereafter, on
content areas established by the State agency.
(c) Each child care center shall comply with the recordkeeping
requirements established in Sec. 226.10(d), in paragraph (b) of this
section and, if applicable, in Sec. 226.15(e). Failure to maintain such
records shall be grounds for the denial of reimbursement.
(d) If so instructed by its sponsoring organization, a sponsored
center must distribute to parents a copy of the sponsoring
organization's notice to parents.
[47 FR 36527, Aug. 20, 1982, as amended at 52 FR 36907, Oct. 2, 1987; 53
FR 52591, Dec. 28, 1988; 54 FR 26724, June 26, 1989; Amdt. 22, 55 FR
1378, Jan. 14, 1990; 61 FR 25554, May 22, 1996; 62 FR 23619, May 1,
1997; 63 FR 9729, Feb. 26, 1998; 64 FR 72261, Dec. 27, 1999; 67 FR
43493, June 27, 2002; 69 FR 53546, Sept. 1, 2004; 70 FR 43262, July 27,
2005]
Sec. 226.18 Day care home provisions.
(a) Day care homes shall have current Federal, State or local
licensing or approval to provide day care services to children. Day care
homes which cannot obtain their license because they lack the funding to
comply with licensing standards may request a total limit per home of
$300 in administrative funds from a sponsoring organization to assist
them in obtaining their license. Day care homes that, at the option of
their sponsoring organization, receive administrative funds for
licensing-related expenses must complete documentation requested by
their sponsor as described in Sec. 226.16(k) prior to receiving any
funds. The agreement must be signed by the sponsoring organization and
the provider and must include the provider's full name, mailing address,
and date of birth. Day care homes which are complying with applicable
procedures to renew licensing or approval may participate in the Program
during the renewal process, unless the State agency has information
which indicates that renewal will be denied. If licensing or approval is
not available, a day care home may participate in the Program if:
(1) The right of the sponsoring organization, the State agency, the
Department, and other State and Federal officials to make announced or
unannounced reviews of the day care home's operations and to have access
to its meal service and records during its normal hours of child care
operations. For day care homes participating July 29, 2002, the
sponsoring organization must amend the current agreement no later than
August 29, 2002;
[[Page 225]]
(2) It demonstrates compliance with CACFP child care standards or
applicable State or local child care standards to the State agency.
(b) Day care homes participating in the program shall operate under
the auspices of a public or private nonprofit sponsoring organization.
Sponsoring organizations shall enter into a written permanent agreement
with each sponsored day care home which specifies the rights and
responsibilities of both parties. Nothing in the preceding sentence
shall be construed to limit the ability of the sponsoring organization
to suspend or terminate the permanent agreement in accordance with Sec.
226.16(l). This agreement shall be developed by the State agency, unless
the State agency elects, at the request of the sponsor, to approve an
agreement developed by the sponsor. At a minimum, the agreement shall
embody:
(1) The right of the sponsoring organization, the State agency, and
the Department to visit the day care home and review its meal service
and records during its hours of child care operations;
(2) The responsibility of the sponsoring organization to require key
staff, as defined by the State agency, to receive Program training prior
to the day care home's participation in the Program, and at least
annually thereafter, on content areas established by the State agency,
and the responsibility of the day care home to participate in that
training;
(3) The responsibility of the day care home to prepare and serve
meals which meet the meal patterns specified in Sec. 226.20;
(4) The responsibility of the day care home to maintain records of
menus, and of the number of meals, by type, served to enrolled children;
(5) The responsibility of the day care home to promptly inform the
sponsoring organization about any change in the number of children
enrolled for care or in its licensing or approval status;
(6) The meal types approved for reimbursement to the day care home
by the State agency;
(7) The right of the day care home to receive in a timely manner the
full food service rate for each meal served to enrolled children for
which the sponsoring organization has received payment from the State
agency. However, if, with the home provider's consent, the sponsoring
organization will incur costs for the provision of program foodstuffs or
meals in behalf of the home, and subtract such costs from Program
payments to the home, the particulars of this arrangement shall be
specified in the agreement. The sponsoring organization must not
withhold Program payments to any family day care home for any other
reason, except that the sponsoring organization may withhold from the
provider any amounts that the sponsoring organization has reason to
believe are invalid, due to the provider having submitted a false or
erroneous meal count;
(8) The right of the sponsoring organization or the day care home to
terminate the agreement for cause or, subject to stipulations by the
State agency, convenience;
(9) A prohibition of any sponsoring organization fee to the day care
home for its Program administrative services;
(10) If the State agency has approved a time limit for submission of
meal records by day care homes, that time limit shall be stated in the
agreement;
(11) The responsibility of the sponsoring organization to inform
tier II day care homes of all of their options for receiving
reimbursement for meals served to enrolled children. These options
include: electing to have the sponsoring organization attempt to
identify all income-eligible children enrolled in the day care home,
through collection of free and reduced price applications and/or
possession by the sponsoring organization or day care home of other
proof of a child or household's participation in a categorically
eligible program, and receiving tier I rates of reimbursement for the
meals served to identified income-eligible children; electing to have
the sponsoring organization identify only those children for whom the
sponsoring organization or day care home possess documentation of the
child or household's participation in a categorically eligible program,
under the expanded categorical eligibility provision contained in
[[Page 226]]
Sec. 226.23(e)(1), and receiving tier I rates of reimbursement for the
meals served to these children; or receiving tier II rates of
reimbursement for all meals served to enrolled children;
(12) The responsibility of the sponsoring organization, upon the
request of a tier II day care home, to collect applications and
determine the eligibility of enrolled children for free or reduced price
meals;
(13) The State agency's policy to restrict transfers of day care
homes between sponsoring organizations;
(14) The responsibility of the day care home to notify their
sponsoring organization in advance whenever they are planning to be out
of their home during the meal service period. The agreement must also
state that, if this procedure is not followed and an unannounced review
is conducted when the children are not present in the day care home,
claims for meals that would have been served during the unannounced
review will be disallowed;
(15) The day care home's opportunity to request an administrative
review if a sponsoring organization issues a notice of proposed
termination of the day care home's Program agreement, or if a sponsoring
organization suspends participation due to health and safety concerns,
in accordance with Sec. 226.6(1)(2); and
(16) If so instructed by its sponsoring organization, the day care
home's responsibility to distribute to parents a copy of the sponsoring
organization's notice to parents.
(c) Each day care home shall serve one or more of the following meal
types:
(1) Breakfast,
(2) Lunch,
(3) Supper and
(4) Supplemental food.
Reimbursement shall not be claimed for more than two meals and one
supplement provided daily to each child.
(d) Each day care home participating in the program shall serve the
meal types specified in its approved application in accordance with the
meal pattern requirements specified in Sec. 226.20. Menu records shall
be maintained to document compliance with these requirements. Meals
shall be served at no separate charge to enrolled children;
(e) Each day care home must maintain on file documentation of each
child's enrollment and must maintain daily records of the number of
children in attendance and the number of meals, by type, served to
enrolled children. Such documentation of enrollment must be updated
annually, signed by a parent or legal guardian, and include information
on each child's normal days and hours of care and the meals normally
received while in care. Each tier II day care home in which the provider
elects to have the sponsoring organization identify enrolled children
who are eligible for free or reduced price meals, and in which the
sponsoring organization employs a meal counting and claiming system in
accordance with Sec. 226.13(d)(3)(i), shall maintain and submit each
month to the sponsoring organization daily records of the number and
types of meals served to each enrolled child by name. Payment may be
made for meals served to the provider's own children only when (1) such
children are enrolled and participating in the child care program during
the time of the meal service, (2) enrolled nonresident children are
present and participating in the child care program and (3) providers'
children are eligible to receive free or reduced-price meals.
Reimbursement may not be claimed for meals served to children who are
not enrolled, or for meals served at any one time to children in excess
of the home's authorized capacity or for meals served to providers'
children who are not eligible for free or reduced-price meals.
(f) The State agency may not require a day care home or sponsoring
organization to maintain documentation of home operating costs.
(g) Each day care home shall comply with the recordkeeping
requirements established in Sec. 226.10(d) and in this section. Failure
to maintain such records
[[Page 227]]
shall be grounds for the denial of reimbursement.
[47 FR 36527, Aug. 20, 1982, as amended by Amdt. 5, 49 FR 18989, May 4,
1984; 50 FR 8580, Mar. 4, 1985; 52 FR 36907, Oct. 2, 1987; Amdt. 22, 55
FR 1378, Jan. 14, 1990; 61 FR 25554, May 22, 1996; 62 FR 903, Jan. 7,
1997; 63 FR 9105, Feb. 24, 1998; 63 FR 9729, Feb. 26, 1998; 64 FR 72261,
Dec. 27, 1999; 67 FR 43493, June 27, 2002; 69 FR 53546, Sept. 1, 2004;
70 FR 34633, June 15, 2005]
Sec. 226.19 Outside-school-hours care center provisions.
(a) Outside-school-hours care centers may participate in the Program
either as independent centers or under the auspices of a sponsoring
organization; Provided, however, That public and private nonprofit
centers shall not be eligible to participate in the Program under the
auspices of a for-profit sponsoring organization. Outside-school-hours
care centers participating as independent centers shall comply with the
provisions of Sec. 226.15.
(b) All outside-school-hours care centers, independent or sponsored,
shall meet the following requirements:
(1) Outside-school-hours care centers shall have current Federal,
State or local licensing or approval to provide organized child care
services to school-age children outside of school hours. The main
purpose of the Program shall be the care and supervision of children.
Outside-school-hours care centers which are complying with applicable
procedures to renew licensing or approval may participate in the Program
during the renewal process, unless the State agency has information
which indicates the renewal will be denied. If licensing or approval is
not available, an outside-school-hours care center may participate in
the Program if:
(i) It receives title XX funds for providing child care; or
(ii) It demonstrates compliance with CACFP child care standards or
any applicable State or local child care standards to the State agency.
(2) Except for for-profit centers, outside-school-hours care centers
shall be public, or have tax-exempt status under the Internal Revenue
Code of 1986.
(3) Nonresidential public or private nonprofit schools which provide
organized child care programs for school children may participate in the
Program as outside-school-hours care centers if:
(i) Children participate in a regularly scheduled program that meets
the criteria of paragraph (b)(1) of this section. The program is
organized for the purpose of providing services to children and is
distinct from any extracurricular programs organized primarily for
scholastic, cultural, or athletic purposes; and
(ii) Separate Program records are maintained.
(4) Outside-school-hours care centers shall be eligible to serve one
or more of the following meal types: breakfasts, supplements and
suppers. In addition, outside-school-hours care centers shall be
eligible to serve lunches to enrolled children during periods of school
vacation, including weekends and holidays, and to children attending
schools which do not offer a lunch program. Notwithstanding the
eligibility of outside-school-hours care centers to serve Program meals
to children on school vacation, including holidays and weekends, such
centers shall not operate under the Program on weekends only.
(5) Each outside-school-hours care center participating in the
Program shall claim only the meal types specified in its approved
application and served in compliance with the meal pattern requirements
of Sec. 226.20. Reimbursement may not be claimed for more than two
meals and one snack provided daily to each child or for meals served to
children at any one time in excess of authorized capacity. For-profit
centers may not claim reimbursement for meals served to children in any
month in which less than 25 percent of the children in care (enrolled or
licensed capacity, whichever is less) were eligible for free or reduced
price meals or were title XX beneficiaries.
(6) Each outside-school-hours care center must require key
operational staff, as defined by the State agency, to attend Program
training prior to the center's participation in the Program, and at
least annually thereafter, on content areas established by the State
agency. Each meal service must be supervised by an adequate number of
operational personnel who have been trained in Program requirements as
[[Page 228]]
outlined in this section. Operational personnel must ensure that:
(i) Meals are served only to children and to adults who perform
necessary food service labor;
(ii) Meals served to children meet the meal pattern requirements
specified in Sec. 226.20;
(iii) Meals served are consumed on the premises of the centers;
(iv) Accurate records are maintained; and
(v) The number of meals prepared or ordered is promptly adjusted on
the basis of participation trends.
(7) Each outside-school-hours care center shall accurately maintain
the following records:
(i) Information used to determine eligibility for free or reduced
price meals in accordance with Sec. 226.23(e)(1);
(ii) Number of meals prepared or delivered for each meal service;
(iii) Daily menu records for each meal service;
(iv) Number of meals served to children at each meal service;
(v) Number of children in attendance during each meal service;
(vi) Number of meals served to adults performing necessary food
service labor for each meal service; and
(vii) All other records required by the State agency financial
management system.
(8) An outside-school-hours care center may utilize existing school
food service facilities or obtain meals from a school food service
facility, and the pertinent requirements of this part shall be embodied
in a written agreement between the outside-school-hours care center and
the school. The center shall maintain responsibility for all Program
requirements set forth in this part.
(c) Each outside-school-hours care center shall comply with the
recordkeeping requirements established in Sec. 226.10(d), in paragraph
(b) of this section and, if applicable, in Sec. 226.15(e). Failure to
maintain such records shall be grounds for the denial of reimbursement.
[47 FR 36527, Aug. 20, 1982, as amended at 52 FR 36907, Oct. 2, 1987; 54
FR 26724, June 26, 1989; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 56 FR
58175, Nov. 16, 1991; 61 FR 25554, May 22, 1996; 62 FR 23619, May 1,
1997; 64 FR 72261, Dec. 27, 1999; 67 FR 43493, June 27, 2002; 69 FR
53546, Sept. 1, 2004; 70 FR 43262, July 27, 2005]
Sec. 226.19a Adult day care center provisions.
(a) Adult day care centers may participate in the Program either as
independent centers or under the auspices of a sponsoring organization;
provided, however, that public and private nonprofit centers shall not
be eligible to participate in the Program under the auspices of a for-
profit sponsoring organization. Adult day care centers participating as
independent centers shall comply with the provisions of Sec. 226.15.
(b) All adult day care centers, independent or sponsored, shall meet
the following requirements:
(1) Adult day care centers shall provide a community-based group
program designed to meet the needs of functionally impaired adults
through an individual plan of care. Such a program shall be a
structured, comprehensive program that provides a variety of health,
social and related support services to enrolled adult participants.
(2) Adult day care centers shall provide care and services directly
or under arrangements made by the agency or organization whereby the
agency or organization maintains professional management responsibility
for all such services.
(3) Adult day care centers shall have Federal, State or local
licensing or approval to provide day care services to functionally
impaired adults (as defined in Sec. 226.2) or individuals 60 years of
age or older in a group setting outside their home or a group living
arrangement on a less than 24-hour basis. Adult day care centers which
are complying with applicable procedures to renew licensing or approval
may participate in the Program during the renewal process, unless the
State agency has information which indicates that renewal will be
denied.
(4) Except for for-profit centers, adult day care centers shall be
public, or
[[Page 229]]
have tax-exempt status under the Internal Revenue Code of 1986.
(5) Each adult day care center participating in the Program shall
serve one or more of the following meal types:
(i) Breakfast,
(ii) Lunch,
(iii) Supper, and
(iv) Supplemental food.
Reimbursement shall not be claimed for more than two meals and one
supplement provided daily to each adult participant.
(6) Each adult day care center participating in the Program shall
claim only the meal types specified in its approved application in
accordance with the meal pattern requirements specified in Sec. 226.20.
Participating centers may not claim CACFP reimbursement for meals
claimed under part C of title III of the Older Americans Act of 1965.
Reimbursement may not be claimed for meals served to persons who are not
enrolled, or for meals served to participants at any one time in excess
of the center's authorized capacity, or for any meal served at a for-
profit center during a calendar month when less than 25 percent of
enrolled participants were title XIX or title XX beneficiaries. Menus
and any other nutritional records required by the State agency shall be
maintained to document compliance with such requirements.
(7) An adult day care center may obtain meals from a school food
service facility, and the pertinent requirements of this part shall be
embodied in a written agreement between the center and school. The
center shall maintain responsibility for all Program requirements set
forth in this part.
(8) Adult day care centers shall collect and maintain documentation
of the enrollment of each adult participant including information used
to determine eligibility for free and reduced price meals in accordance
with Sec. 226.23(e)(1).
(9) Each adult day care center must maintain daily records of time
of service meal counts by type (breakfast, lunch, supper, and snacks)
served to enrolled participants, and to adults performing labor
necessary to the food service.
(10) Each adult day care center shall maintain records on the age of
each enrolled person. In addition, each adult day care center shall
maintain records which demonstrate that each enrolled person under the
age of 60 meets the functional impairment eligibility requirements
established under the definition of ``functionally impaired adult''
contained in this part. Finally, each adult day care center shall
maintain records which document that qualified adult day care
participants reside in their own homes (whether alone or with spouses,
children or guardians) or in group living arrangements as defined in
Sec. 226.2.
(11) Each adult day care center must require key operational staff,
as defined by the State agency, to attend Program training prior to the
facility's participation in the Program, and at least annually
thereafter, on content areas established by the State agency. Each meal
service must be supervised by an adequate number of operational
personnel who have been trained in Program requirements as outlined in
this section.
(c) Each adult day care center shall comply with the recordkeeping
requirements established in Sec. 226.10(d), in paragraph (b) of this
section and, if applicable, in Sec. 226.15(e). Failure to maintain such
records shall be grounds for the denial of reimbursement.
[53 FR 52591, Dec. 28, 1988, as amended by Amdt. 22, 55 FR 1378, Jan.
14, 1990; 61 FR 25554, May 22, 1996; 62 FR 23619, May 1, 1997; 64 FR
72261, Dec. 27, 1999; 67 FR 43493, June 27, 2002; 69 FR 53546, Sept. 1,
2004]
Sec. 226.20 Requirements for meals.
(a) Except as otherwise provided in this section, each meal served
in the Program shall contain, as a minimum, the indicated food
components:
(1) A breakfast shall contain: (i) Fluid milk as a beverage or on
cereal, or used in part for each purpose;
(ii) Vegetable(s) or fruit(s) or full-strength vegetable or fruit
juice, or any combination of these foods;
(iii) Whole-grain or enriched bread; or cornbread, biscuits, rolls,
muffins, etc., made with whole-grain or enriched meal or flour; or
whole-grain or enriched or fortified cereal; or cooked whole-grain or
enriched pasta or noodle
[[Page 230]]
products such as macaroni, or cereal grains such as rice, bulgur, or
corn grits; or any combination of these foods.
(2) Lunch shall contain: (i) Fluid milk as a beverage;
(ii)(A) Lean meat, poultry or fish; alternate protein products; or
cheese; or an egg; or cooked dry beans or peas; or peanut butter; or any
combination of these foods. These foods must be served in a main dish,
or in a main dish and one other menu item, to meet this requirement.
Cooked dry beans or dry peas may be used as the meat alternate or as
part of the vegetable/fruit component but not as both food components in
the same meal;
(B) Nuts and seeds and their butters listed in program guidance are
nutritionally comparable to meat or other meat alternates based on
available nutritional data. Acorns, chestnuts, and coconuts shall not be
used as meat alternates due to their low protein content. Nut or seed
meals or flours may be used as an ingredient in a bread/bread alternate,
but shall not be used as a meat alternate except as defined in this part
under Appendix A: Alternate Foods for Meals, and in program guidance
materials. As noted in paragraph (c)(2) of this section, nuts or seeds
may be used to meet no more than one-half of the meat/meat alternate
requirements. Therefore, nuts or seeds must be combined with another
meat/meat alternate to fulfill the requirement;
(C) Yogurt may be used to meet all or part of the meat/meat
alternate requirement. Yogurt served may be either plain or flavored,
unsweetened or sweetened. Noncommercial and/or nonstandardized yogurt
products, such as frozen yogurt, homemade yogurt, yogurt flavored
products, yogurt bars, yogurt covered fruit and/or nuts or similar
products shall not be credited. Four ounces (weight) or \1/2\ cup
(volume) of yogurt fulfills the equivalent of one ounce of the meat/meat
alternate requirement in the meal pattern.
(iii) Two or more vegetables or fruits, or a combination of both.
Full-strength vegetable or fruit juice may be counted to meet not more
than one-half of this requirement;
(iv) Whole-grain or enriched bread; or cornbread, biscuits, rolls,
muffins, etc., made with whole-grain or enriched meal or flour; or
whole-grain or enriched pasta or noodle products such as macaroni, or
cereal grains such as rice, bulgur, or corn grits; or any combination of
these foods.
(3) Supper shall contain the food components and servings listed for
lunch in Sec. 226.20(a)(2), except that, for adult participants in
adult day care centers, it does not require a serving of fluid milk.
(4) Supplemental food shall contain two of the following four
components:
(i) Fluid milk as a beverage, or on cereal, or used in part for each
purpose;
(ii) Meat or meat alternate. Nuts and seeds and their butters listed
in program guidance are nutritionally comparable to meat or other meat
alternates based on available nutritional data. Acorns, chestnuts, and
coconuts are excluded and shall not be used as meat alternates due to
their low protein content. Nut or seed meals or flours shall not be used
as a meat alternate except as defined in this part under Appendix A:
Alternate Foods for Meals;
(iii) Vegetable(s) or fruit(s) or full-strength vegetable or fruit
juice, or any combination of these foods. For children, juice may not be
served when milk is served as the only other component;
(iv) Whole-grain or enriched bread; or cornbread, biscuits, rolls,
muffins, etc., made with whole-grain or enriched meal or flour; or
cooked whole-grain or enriched pasta or noodle products such as
macaroni, or cereal grains such as rice, bulgar, or corn grits; or any
combination of these foods.
(b) What are the requirements for the infant meal pattern?--(1)
Feeding meals to infants. Meals served to infants ages birth through 11
months must meet the requirements described in paragraph (b)(6) of this
section. Foods included in the infant meal must be of a texture and a
consistency that are appropriate for the age of the infant being served.
The foods must be served during a span of time consistent with the
infant's eating habits. For those infants whose dietary needs are more
individualized, exceptions to the meal pattern must be
[[Page 231]]
made in accordance with the requirements found in paragraph (h) of this
section.
(2) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Meals containing breastmilk and meals containing
iron-fortified infant formula supplied by the facility are eligible for
reimbursement. However, infant formula provided by a parent (or
guardian) and breastmilk fed directly by the infant's mother, during a
visit to the facility, contribute to a reimbursable meal only when the
facility supplies at least one component of the infant's meal.
(3) Fruit juice. Juice should not be offered to infants until they
are 6 months of age and ready to drink from a cup. Feeding fruit juice
only from a cup will help develop behaviors that may prevent early
childhood caries. Fruit juice served as part of the meal pattern for
infants 8 through 11 months must be full-strength.
(4) Solid foods. Solid foods of an appropriate texture and
consistency are required only when the infant is developmentally ready
to accept them. The facility should consult with the infant's parent (or
guardian) in making the decision to introduce solid foods. Solid foods
should be introduced one at a time on a gradual basis with the intent of
ensuring the infant's health and nutritional well-being.
(5) Infant meal pattern. Infant meals must have, at a minimum, each
of the food components indicated, in the amount that is appropriate for
the infant's age. For some breastfed infants who regularly consume less
than the minimum amount of breastmilk per feeding, a serving of less
than the minimum amount of breastmilk may be offered. In these
situations, additional breastmilk must be offered if the infant is still
hungry. Meals may include portions of breastmilk and iron-fortified
infant formula as long as the total number of ounces meets, or exceeds,
the minimum amount required of this food component. Similarly, to meet
the component requirements for vegetables and fruit, portions of both
may be served.
(i) Birth through 3 months. Only breastmilk or iron-fortified
formula is required to meet the infant's nutritional needs.
(A) Breakfast--4 to 6 fluid ounces of breastmilk or iron-fortified
infant formula.
(B) Lunch or supper--4 to 6 fluid ounces of breastmilk or iron-
fortified infant formula.
(C) Snack--4 to 6 fluid ounces of breastmilk or iron-fortified
infant formula.
(ii) 4 through 7 months. Breastmilk or iron-fortified formula is
required. Some infants may be developmentally ready for solid foods of
an appropriate texture and consistency. Meals are reimbursable when
facilities provide all of the components in the meal pattern that the
infant is developmentally ready to accept.
(A) Breakfast--4 to 8 fluid ounces of breastmilk or iron-fortified
infant formula; and 0 to 3 tablespoons of iron-fortified dry infant
cereal.
(B) Lunch or supper--4 to 8 fluid ounces of breastmilk or iron-
fortified infant formula; and 0 to 3 tablespoons of iron-fortified dry
infant cereal; and 0 to 3 tablespoons of fruit or vegetable.
(C) Snack--4 to 6 fluid ounces of breastmilk or iron-fortified
infant formula.
(iii) 8 through 11 months. Breastmilk or iron-fortified formula and
solid foods of an appropriate texture and consistency are required.
Meals are reimbursable when facilities provide all of the components in
the meal pattern that the infant is developmentally ready to accept.
(A) Breakfast--6 to 8 fluid ounces of breastmilk or iron-fortified
infant formula; 2 to 4 tablespoons of iron-fortified dry infant cereal;
and 1 to 4 tablespoons of fruit or vegetable.
(B) Lunch or supper--6 to 8 fluid ounces of breastmilk or iron-
fortified infant formula; 2 to 4 tablespoons of iron-fortified dry
infant cereal; and/or 1 to 4 tablespoons of meat, fish, poultry, egg
yolk, or cooked dry beans or peas; or \1/2\ to 2 ounces (weight) of
cheese; or 1 to 4 ounces (volume) of cottage cheese; or 1 to 4 ounces
(weight) of cheese food or cheese spread; and 1 to 4 tablespoons of
fruit or vegetable.
[[Page 232]]
(C) Snack--2 to 4 fluid ounces of breastmilk, iron-fortified infant
formula, or full strength fruit juice; and 0 to \1/2\ slice of crusty
bread (if developmentally ready) or 0 to 2 cracker type products (if
developmentally ready), which are made from whole-grain or enriched meal
or flour, and suitable as a finger food for an infant.
(6) Infant meal pattern table. The minimum amounts of food
components to serve to infants, as described in paragraph (b)(5) of this
section, are:
Child Care Infant Meal Pattern
----------------------------------------------------------------------------------------------------------------
Type of meal service Birth through 3 months 4 through 7 months 8 through 11 months
----------------------------------------------------------------------------------------------------------------
Breakfast............................ 4-6 fluid ounces of 4-8 fluid ounces of 6-8 fluid ounces of
formula\1\ or formula\1\ or formula\1\ or
breastmilk \2\ \3\. breastmilk\2\ \3\; and. breastmilk\2\ \3\; and
0-3 tablespoons of 2-4 tablespoons of
infant cereal\1\ \4\. infant cereal \1\; and
1-4 tablespoons of
fruit or vegetable or
both.
Lunch or Supper...................... 4-6 fluid ounces of 4-8 fluid ounces of 6-8 fluid ounces of
formula\1\ or formula\1\ or formula\1\ or
breastmilk\2\ \3\. breastmilk\2\ \3\; and. breastmilk\2\ \3\; and
0-3 tablespoons of 2-4 tablespoons of
infant cereal \1\ \4\; infant cereal \1\; and/
and. or
0-3 tablespoons of 1-4 tablespoons of
fruit or vegetable or meat, fish, poultry,
both \4\. egg yolk, cooked dry
beans or peas; or
\1/2\-2 ounces of
cheese; or
1-4 ounces (volume) of
cottage cheese; or
1-4 ounces (weight) of
cheese food or cheese
spread; and
1-4 tablespoons of
fruit or vegetable or
both.
Snack................................ 4-6 fluid ounces of 4-6 fluid ounces of 2-4 fluid ounces of
formula\1\ or formula\1\ or formula\1\,
breastmilk\2\ \3\. breastmilk\2\ \3\. breastmilk\2\ \3\, or
fruit juice\5\; and
0-\1/2\ slice of
bread\4\ \6\ or 0-2
crackers\4\ \6\.
----------------------------------------------------------------------------------------------------------------
\1\ Infant formula and dry infant cereal must be iron-fortified.
\2\ Breastmilk or formula, or portions of both, may be served; however, it is recommended that breastmilk be
served in place of formula from birth through 11 months.
\3\ For some breastfed infants who regularly consume less than the minimum amount of breastmilk per feeding, a
serving of less than the minimum amount of breastmilk may be offered, with additional breastmilk offered if
the infant is still hungry.
\4\ A serving of this component is required only when the infant is developmentally ready to accept it.
\5\ Fruit juice must be full-strength.
\6\ A serving of this component must be made from whole-grain or enriched meal or flour.
(c) Meal patterns for children age one through 12 and adult
participants. When individuals over age one participate in the Program,
the total amount of food authorized in the meal patterns set forth below
shall be provided in order to qualify for reimbursement.
(1) Breakfast. The minimum amount of food components to be served as
breakfast as set forth in paragraph (a)(1) of this section are as
follows:
----------------------------------------------------------------------------------------------------------------
Age 6 through 12
Food components Age 1 and 2 Age 3 through 5 \1\ Adult participants
----------------------------------------------------------------------------------------------------------------
Milk, fluid.................... \1/2\ cup \2\...... \3/4\ cup......... 1 cup............. 1 cup.\2\
Vegetables and Fruits or....... \1/4\ cup.......... \1/2\ cup......... \1/2\ cup......... \1/2\ cup.
Full-strength vegetable or \1/4\ cup.......... \1/2\ cup......... \1/2\ cup......... \1/2\ cup.
fruit juice or an equivalent
quantity of any combination of
vegetable(s), fruit(s), and
juice.
Bread and Bread Alternates \3\
Bread or....................... \1/2\ slice........ \1/2\ slice....... 1 slice........... 2 slices
(servings).
Cornbread, biscuits, rolls, \1/2\ serving...... \1/2\ serving..... 1 serving......... 2 servings.
muffins, etc.\4\ or.
Cold dry cereal \5\ or......... \1/4\ cup or \1/3\ \1/3\ cup or \1/2\ \3/4\ cup or 1 1\1/2\ cup or 2
ounce. ounce. ounce. ounces.
Cooked cereal or............... \1/4\ cup.......... \1/4\ cup......... \1/2\ cup......... 1 cup.
Cooked pasta or noodle products \1/4\ cup.......... \1/4\ cup......... \1/2\ cup......... 1 cup.
or.
[[Page 233]]
Cooked cereal grains or an \1/4\ cup.......... \1/4\ cup......... \1/2\ cup......... 1 cup.
equivalent quantity of any
combination of bread/bread
alternate.
----------------------------------------------------------------------------------------------------------------
\1\ Children age 12 and up may be served adult size portions based on the greater food needs of older boys and
girls, but shall be served not less than the minimum quantities specified in this section for children age 6
up to 12.
\2\ For purposes of the requirements outlined in this subsection, a cup means a standard measuring cup.
\3\ Bread, pasta or noodle products, and cereal grains, shall be whole grain or enriched; cornbread, biscuits,
rolls, muffins, etc., shall be made with whole grain or enriched meal or flour; cereal shall be whole grain or
enriched or fortified.
\4\ Serving sizes and equivalents to be published in guidance materials by FNS.
\5\ Either volume (cup) or weight (ounces) whichever is less.
(2) Lunch. The minimum amount of food components to be served as
lunch as set forth in paragraph (a)(2) of this section are as follows:
----------------------------------------------------------------------------------------------------------------
Age 6 through 12
Food components Age 1 and 2 Age 3 through 5 \1\ Adult participants
----------------------------------------------------------------------------------------------------------------
Milk, fluid.................... \1/2\ cup \2\...... \3/4\ cup......... 1 cup............. 1 cup \2\.
Vegetables and Fruits \3\
Vegetables(s) and/or fruit(s).. \1/4\ cup total.... \1/2\ cup total... \3/4\ cup total... 1 cup total.
Bread and Bread Alternates \4\
Bread or....................... \1/2\ slice........ \1/2\ slice....... 1 slice........... 2 slices
(servings).
Cornbread, biscuits, rolls, \1/2\ serving...... \1/2\ serving..... 1 serving......... 2 servings.
muffins, etc.\5\ or.
Cooked pasta or noodle products \1/4\ cup.......... \1/4\ cup......... \1/2\ cup......... 1 cup.
or.
Cooked cereal grains or an \1/4\ cup.......... \1/4\ cup......... \1/2\ cup......... 1 cup.
equivalent quantity of any
combination of bread/bread
alternate.
Meat and Meat Alternates
Lean meat or poultry or fish 1 ounce............ 1\1/2\ ounces..... 2 ounces.......... 2 ounces.
\6\ or.
Alternate protein products \7\ 1 ounce............ 1\1/2\ ounces..... 2 ounces.......... 2 ounces.
or.
Cheese or...................... 1 ounce............ 1\1/2\ ounces..... 2 ounces.......... 2 ounces.
Egg (large) or................. \1/2\.............. \3/4\............. 1................. 1.
Cooked dry beans or peas or.... \1/4\ cup.......... \3/8\ cup......... \1/2\ cup......... \1/2\ cup.
Peanut butter or soynut butter 2 tablespoons...... 3 tablespoons..... 4 tablespoons..... 4 tablespoons.
or other nut or seed butters
or.
Peanuts or soynuts or tree nuts \1/2\ ounce \9\=50% \3/4\ ounce 1 ounce \9\=50%... 1 ounce \9\=50%.
or seeds \8\ or. \9\=50%.
Yogurt, plain or flavored, 4 ounces or \1/2\ 6 ounces or \3/4\ 8 ounces or 1 cup. 8 ounces or 1 cup.
unsweetened or sweetened or an cup. cup.
equivalent quantity of any
combination of the above meat/
meat alternates.
----------------------------------------------------------------------------------------------------------------
\1\ Children age 12 and up may be served adult size portions based on the greater food needs of older boys and
girls, but shall be served not less than the minimum quantities specified in this section for children age 6
up to 12.
\2\ For purposes of the requirements outlined in this subsection, a cup means a standard measuring cup.
\3\ Serve 2 or more kinds of vegetable(s) and/or fruit(s). Full-strength vegetable or fruit juice may be counted
to meet not more than one-half of this requirement.
\4\ Bread, pasta or noodle products, and cereal grains, shall be whole grain or enriched; cornbread, biscuits,
rolls, muffins, etc., shall be made with whole grain or enriched meal or flour.
\5\ Serving sizes and equivalents to be published in guidance materials by FNS.
\6\ Edible portion as served.
\7\ Must meet the requirements in appendix A of this part.
\8\ Tree nuts and seeds that may be used as meat alternates are listed in program guidance.
\9\ No more than 50% of the requirement shall be met with nuts or seeds. Nuts or seeds shall be combined with
another meat/meat alternate to fulfill the requirement. For purpose of determining combinations, 1 ounce of
nuts or seeds is equal to 1 ounce of cooked lean meat, poultry, or fish.
(3) Supper. The minimum amount of food components to be served as
supper as set forth in paragraph (a)(3) of this section are as follows:
----------------------------------------------------------------------------------------------------------------
Age 6 through 12
Food components Age 1 and 2 Age 3 through 5 \1\ Adult participants
----------------------------------------------------------------------------------------------------------------
Milk, fluid.................... \1/2\ cup \2\...... \3/4\ cup \2\..... 1 cup............. None.
Vegetables and Fruits \3\
Vegetables(s) and/or fruit(s).. \1/4\cup total..... \1/2\ cup total... \3/4\ cup total... 1 cup total.
Bread and Bread Alternates \4\
Bread or....................... \1/2\ slice........ \1/2\ slice....... 1 slice........... 2 slices
(servings).\5\
[[Page 234]]
Cornbread, biscuits, rolls, \1/2\ serving...... \1/2\ serving..... 1 serving......... 2 servings.
muffins, etc.\5\ or.
Cooked cereal grains or an \1/4\ cup.......... \1/4\ cup......... \1/2\ cup......... 1 cup.
equivalent quantity of any
combination of bread/bread
alternate.
Meat and Meat Alternates
Lean meat or poultry or fish 1 ounce............ 1\1/2\ ounces..... 2 ounces.......... 2 ounces.
\6\ or.
Alternate protein products \7\ 1 ounce............ 1\1/2\ ounces..... 2 ounces.......... 2 ounces.
or.
Cheese or...................... 1 ounce............ 1\1/2\ ounces..... 2 ounces.......... 2 ounces.
Egg (large) or................. \1/2\.............. \3/4\............. 1................. 1.
Cooked dry beans or peas or.... \1/4\ cup.......... \3/8\ cup......... \1/2\ cup......... \1/2\ cup.
Peanut butter or soynut butter 2 tablespoons...... 3 tablespoons..... 4 tablespoons..... 4 tablespoons.
or other nut or seed butters
or.
Peanuts or soynuts or tree nuts \1/2\ ounce \9\=50% \3/4\ ounce 1 ounce \9\=50%... 1 ounce \9\=50%.
or seeds \8\ or. \9\=50%.
Yogurt, plain or flavored, 4 ounces or \1/2\ 6 ounces or \3/4\ 8 ounces or 1 cup. 8 ounces or 1 cup.
unsweetened or sweetened or an cup. cup.
equivalent quantity of any
combination of the above meat/
meat alternates.
----------------------------------------------------------------------------------------------------------------
\1\ Children age 12 and up may be served adult size portions based on the greater food needs of older boys and
girls, but shall be served not less than the minimum quantities specified in this section for children age 6
up to 12.
\2\ For purposes of the requirements outlined in this subsection, a cup means a standard measuring cup.
\3\ Serve 2 or more kinds of vegetable(s) and/or fruit(s). Full-strength vegetable or fruit juice may be counted
to meet not more than one-half of this requirement.
\4\ Bread, pasta or noodle products, and cereal grains, shall be whole grain or enriched; cornbread, biscuits,
rolls, muffins, etc., shall be made with whole grain or enriched meal or flour.
\5\ Serving sizes and equivalents to be published in guidance materials by FNS.
\6\ Edible portion as served.
\7\ Must meet the requirements in appendix A of this part.
\8\ Tree nuts and seeds that may be used as meat alternates are listed in program guidance.
\9\ No more than 50% of the requirement shall be met with nuts or seeds. Nuts or seeds shall be combined with
another meat/meat alternate to fulfill the requirement. For purpose of determining combinations, 1 ounce of
nuts or seeds is equal to 1 ounce of cooked lean meat, poultry, or fish.
(4) Snack. The minimum amounts of food components to be served as
snack as set forth in paragraph (a)(4) of this section are as follow.
Select two of the following four components. (For children, juice may
not be served when milk is served as the only other component.)
----------------------------------------------------------------------------------------------------------------
Age 6 through 12 Adult participants
Food components Age 1 and 2 Age 3 through 5 \1\ \1\
----------------------------------------------------------------------------------------------------------------
MILK
----------------------------------------------------------------------------------------------------------------
Milk, fluid..................... \1/2\ cup \2\..... \1/2\ cup......... 1 cup............. 1 cup.
----------------------------------------------------------------------------------------------------------------
VEGETABLES AND FRUIT
----------------------------------------------------------------------------------------------------------------
Vegetable(s) and/or fruit(s) or. \1/2\ cup......... \1/2\ cup......... \3/4\ cup......... \1/2\ cup.
Full-strength vegetable or fruit \1/2\ cup......... \1/2\ cup......... \3/4\ cup......... \1/2\ cup.
juice or an equivalent quantity
of any combination of
vegetable(s), fruit(s), and
juice.
----------------------------------------------------------------------------------------------------------------
BREAD AND BREAD ALTERNATES \3\
----------------------------------------------------------------------------------------------------------------
Bread or........................ \1/2\ slice....... \1/2\ slice....... 1 slice........... 1 slice (serving).
Cornbread, biscuits, rolls, \1/2\ serving..... \1/2\ serving..... 1 serving......... 1 serving.
muffins, etc.\4\ or.
Cold dry cereal \5\............. \1/4\ cup or...... \1/3\ cup or...... \3/4\ cup or...... \3/4\ cup or.
\1/3\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
Cooked pasta or noodle products \1/4\ cup......... \1/4\ cup......... \1/2\ cup......... \1/2\ cup.
or.
Cooked cereal or grains or an \1/4\ cup......... \1/4\ cup......... \1/2\ cup......... \1/2\ cup.
equivalent quantity of any
combination of bread/bread
alternates.
----------------------------------------------------------------------------------------------------------------
MEAT AND MEAT ALTERNATES
----------------------------------------------------------------------------------------------------------------
Lean meat or poultry or fish \6\ \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
or.
Alternate protein products \7\ \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
or.
Cheese or....................... \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1ounce.
Egg (large) \8\ or.............. \1/2\ egg......... \1/2\ egg......... \1/2\ egg......... \1/2\ egg.
Cooked dry beans or peas or..... \1/8\ cup......... \1/8\ cup......... \1/4\ cup......... \1/4\ cup.
Peanut butter or soynut butter 1 tablespoon...... 1 tablespoon...... 2 tablespoons..... 2 tablespoons.
or other nut or seed butters or.
[[Page 235]]
Peanuts or soynuts or tree nuts \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
or seeds \9\ or.
Yogurt, plain or flavored, 2 ounces or \1/4\ 2 ounces or \1/4\ 4 ounces or \1/2\ 4 ounces or \1/2\
unsweetened or sweetened, or an cup. cup. cup. cup.
equivalent quantity of any
combination of meat/meat
alternates.
----------------------------------------------------------------------------------------------------------------
\1\ Children age 12 and up may be served adult size portions based on the greater food needs of older boys and
girls, but shall be served not less than the minimum quantities specified in this section for children age 6
up to 12.
\2\ For purposes of the requirements outlined in this subsection, a cup means a standard measuring cup.
\3\ Bread, pasta or noodle products, and cereal grains shall be whole-grain or enriched; cornbread, biscuits,
rolls, muffins, etc. shall be made with whole-grain or enriched meal or flour; cereal shall be whole-grain or
enriched or fortified.
\4\ Serving size and equivalents to be published in guidance materials by FNS.
\5\ Either volume (cup) or weight (ounce), whichever is less.
\6\ Edible portion as served.
\7\ Must meet the requirements in Appendix A of this part.
\8\ One-half egg meets the required minimum amount (one ounce or less) of meat alternate.
\9\ Tree nuts and seeds that may be used as meat alternates are listed in program guidance.
(d) Additional food. To improve the nutrition of participating
children over 1 year of age additional foods may be served with each
meal as follows:
(1) Breakfast. Include as often as practical one-half egg; or a 1-
ounce serving (edible portion as served) of meat, poultry or fish; or 1-
ounce of cheese; or 2 tablespoons of peanut butter; or 4 oz. of yogurt;
or an equivalent quantity of any combination of these foods. Additional
foods may be served as desired.
(2) Lunch, supper or supplemental food. Additional foods may be
served as desired.
(e) Temporary unavailability of milk. If emergency conditions
prevent an institution normally having a supply of milk from temporarily
obtaining milk deliveries, the State agency may approve the service of
breakfasts, lunches, or suppers without milk during the emergency
period.
(f) Continuing unavailability of milk. The inability of an
institution to obtain a supply of milk on a continuing basis shall not
bar it from participation in the Program. In such cases, the State
agency may approve service of meals without milk, provided that an
equivalent amount of canned, whole dry or nonfat dry milk is used in the
preparation of the components of the meal set forth in paragraphs
(a)(1), (2) and (3) of this section.
(g) Statewide substitutions. In American Samoa, Puerto Rico, Guam,
the Virgin Islands, the Trust Territory of the Pacific Islands, and the
Northern Mariana Islands the following variations from the meal
requirements are authorized: A serving of a starchy vegetable, such as
yams, plantains, or sweet potatoes may be substituted for the bread
requirements.
(h) Individual substitutions. Substitutions may be made in food
listed in paragraphs (b) and (c) of this section if individual
participants are unable, because of medical or other special dietary
needs, to consume such foods. Substitutions because of medical needs
shall be made only when supported by a statement from a recognized
medical authority which includes recommended alternate foods.
(i) Special variations. FNS may approve variations in the food
components of the meals on an experimental or a continuing basis in any
institution where there is evidence that such variations are
nutritionally sound and are necessary to meet ethnic, religious,
economic, or physical needs.
(j) Meal planning. Institutions shall plan for and order meals on
the basis of current participation trends, with the objective of
providing only one meal per participant at each meal service. Records of
participation and of ordering or preparing meals shall be maintained to
demonstrate positive action toward this objective. In recognition of the
fluctuation in participation levels which makes it difficult to estimate
precisely the number of meals needed and to reduce the resultant waste,
any excess meals that are ordered may be served to participants and may
be claimed for reimbursement, unless the State agency determines that
the institution has failed to plan and prepare or order meals with the
objective of providing only one meal per participant at each meal
service.
[[Page 236]]
(k) Time of meal service. State agencies may require any institution
or facility to allow a specific amount of time to elapse between meal
services or require that meal services not exceed a specified duration.
(l) Sanitation. Institutions shall ensure that in storing,
preparing, and serving food, proper sanitation and health standards are
met which conform with all applicable State and local laws and
regulations. Institutions shall ensure that adequate facilities are
available to store food or hold meals.
(m) Donated commodities. Institutions shall efficiently use in the
Program any foods donated by the Department and accepted by the
institution.
(n) Plentiful foods. Institutions shall, insofar as practical,
purchase and efficiently use in the Program foods designated as
plentiful by the Department.
(o) Additional provision. The State agency may allow institutions
which serve meals prepared in schools participating in the National
School Lunch and School Breakfast Programs to substitute the meal
pattern requirements of the regulations governing those Programs (7 CFR
part 210 and 7 CFR part 220, respectively) for the meal pattern
requirements contained in this section.
(p) Family-style meal service. Meals may be served in a family-style
setting.
(q) Offer versus serve. (1) Each adult day care center shall offer
its adult participants all of the required food servings as set forth in
paragraph (c)(1), (c)(2) and (c)(3) of this section. However, at the
discretion of the adult day care center, adult participants may be
permitted to decline:
(i) One of the four food items (one serving of milk, one serving of
vegetable and/or fruit, and two servings of bread or bread alternate)
required at breakfast;
(ii) Two of the six food items (one serving of milk, two servings of
vegetable and/or fruit, two servings of bread or bread alternate, and
one serving of meat or meat alternate) required at lunch;
(iii) Two of the five food items (two servings of vegetables and/or
fruit, two servings of bread or bread alternate, and one serving of meat
or meat alternate) required at supper.
(2) The price of a reimbursable meal shall not be affected if an
adult participant declines a food item.
[47 FR 36527, Aug. 20, 1982; 48 FR 40197, Sept. 16, 1983, as amended at
50 FR 8581, Mar. 4, 1985; 51 FR 16811, May 7, 1986; 51 FR 23515, June
30, 1986; 53 FR 25308, July 6, 1988; 53 48632, Dec. 2, 1988; 53 FR
52592, Dec. 28, 1988; 54 FR 27153, June 28, 1989; 58 FR 37850, July 14,
1993; 62 FR 10191, Mar. 6, 1997; 64 FR 61775, Nov. 15, 1999; 64 FR
72261, Dec. 27, 1999; 65 FR 12439, Mar. 9, 2000; 66 FR 65597, Dec. 20,
2001; 67 FR 36786, May 28, 2002; 69 FR 53546, Sept. 1, 2004]
Sec. 226.21 Food service management companies.
(a) Any institution may contract with a food service management
company. An institution which contracts with a food service management
company shall remain responsible for ensuring that the food service
operation conforms to its agreement with the State agency. All
procurements of meals from food service management companies shall
adhere to the procurement standards set forth in Sec. 226.22. Public
institutions shall follow applicable State or local laws governing bid
procedures. In the absence of any applicable State or local laws, and in
addition to the procurement provisions set forth in Sec. 226.22, the
State agency may mandate that each institution with Program meal
contracts of an aggregate value in excess of $10,000 formally advertise
such contracts and comply with the following procedures intended to
prevent fraud, waste, and Program abuse:
(1) All proposed contracts shall be publicly announced at least once
14 calendar days prior to the opening of bids. The announcement shall
include the time and place of the bid opening;
(2) The institution shall notify the State agency at least 14
calendar days prior to the opening of the bids of the time and place of
the bid opening;
(3) The invitation to bid shall not provide for loans or any other
monetary benefit or terms or conditions to be made to institutions by
food service management companies;
(4) Nonfood items shall be excluded from the invitation to bid,
except
[[Page 237]]
where such items are essential to the conduct of the food service;
(5) The invitation to bid shall not specify special meal
requirements to meet ethnic or religious needs unless special
requirements are necessary to meet the needs of the participants to be
served;
(6) The bid shall be publicly opened;
(7) All bids totaling $50,000 or more shall be submitted to the
State agency for approval before acceptance. All bids shall be submitted
to the State agency for approval before accepting a bid which exceeds
the lowest bid. State agencies shall respond to any request for approval
within 10 working days of receipt;
(8) The institutions shall inform the State agency of the reason for
selecting the food service management company chosen. State agencies may
require institutions to submit copies of all bids submitted under this
section.
(b) The institution and the food service management company shall
enter into a standard contract as required by Sec. 226.6(i). However,
public institutions may, with the approval of the State agency, use
their customary form of contract if it incorporates the provisions of
Sec. 226.6(i).
(c) A copy of the contract between each institution and food service
management company shall be submitted to the State agency prior to the
beginning of Program operations under the subject contract.
(d) Each proposed additional provision to the standard form of
contract shall be submitted to the State agency for approval.
(e) A food service management company may not subcontract for the
total meal, with or without milk, or for the assembly of the meal.
[47 FR 36527, Aug. 20, 1982, as amended at 53 FR 52594, Dec. 28, 1988]
Sec. 226.22 Procurement standards.
(a) This section establishes standards and guidelines for the
procurement of foods, supplies, equipment, and other goods and services.
These standards are furnished to ensure that such materials and services
are obtained efficiently and economically and in compliance with the
provisions of applicable Federal law and Executive orders.
(b) These standards shall not relieve the institution of any
contractual responsibilities under its contracts. The institution is
responsible, in accordance with good administrative practice and sound
business judgment, for the settlement of all contractual and
administrative issues arising out of procurements entered into in
support of the Program. These include, but are not limited to: source
evaluation, protests of award, disputes, and claims. Violations of the
law shall be referred to the local, State, or Federal authority having
proper jurisdiction.
(c) Institutions may use their own procurement procedures which
reflect applicable State or local laws and regulations, provided that
procurements made with Program payments conform to the standards set
forth in this section and in Attachment O of Office of Management and
Budget Circulars A-102 and A-110, as well as to procurement requirements
which may be established by the State agency, with the approval of FNS
to prevent fraud, waste, and Program abuse.
(d) Institutions shall maintain a written code of standards of
conduct which shall govern the performance of their officers, employees
or agents engaged in the award and administration of contracts supported
by Program payments. No employee, officer or agent of the grantee shall
participate in selection, or in the award or administration of a
contract supported by Federal funds if a conflict of interest, real or
apparent, would be involved. Such a conflict would arise when:
(1) The employee, officer or agent;
(2) Any member of his immediate family;
(3) His or her partner; or
(4) An organization which employs, or is about to employ, any of the
above, has a financial or other interest in the firm selected for award.
The institution's officers, employees or agents shall neither solicit
nor accept gratuities, favors or anything of monetary value from
contractors, potential contractors, or parties to subagreements.
Institutions may set minimum rules where the financial interest is not
substantial or the gift is an unsolicited item of nominal intrinsic
value. To the extent permitted by State or
[[Page 238]]
local law or regulations, such standards of conduct shall provide for
penalties, sanctions, or other disciplinary actions for violations of
such standards by the institution's officers, employees, or agents, or
by contractors or their agents.
(e) The institution shall establish procurement procedures which
provide that proposed procurement actions shall be reviewed by
institution officials to avoid the purchase of unnecessary or
duplicative items. Where appropriate, an analysis shall be made of lease
versus purchase alternatives, and any other appropriate analysis to
determine which approach would be the most economical.
(f) Affirmative steps shall be taken to assure that small and
minority businesses are utilized when possible. Affirmative steps shall
include the following:
(1) Including qualified small and minority businesses on
solicitation lists;
(2) Assuring that small and minority businesses are solicited
whenever they are potential sources;
(3) When economically feasible, dividing total requirements into
smaller tasks or quantities so as to permit maximum small and minority
business participation;
(4) Where the requirement permits, establishing delivery schedules
which will encourage participation by small and minority businesses;
(5) Using the services and assistance of the Small Business
Administration and the Minority Business Enterprise of the Department of
Commerce as required;
(6) If any subcontracts are to be let, requiring the prime
contractor to take the affirmative steps in paragraphs (b) (1) through
(5) of this section; and
(7) Taking similar appropriate affirmative action in support of
women's business enterprises.
(g) All procurement transactions, regardless of whether by sealed
bids or by negotiation and without regard to dollar value, shall be
conducted in a manner that provides maximum open and free competition
consistent with this section. Procurement procedures shall not restrict
or eliminate competition. Examples of what is considered to be
restrictive of competition include, but are not limited to (1) placing
unreasonable requirements on firms in order for them to qualify to do
business, (2) noncompetitive practices between firms, (3) organizational
conflicts of interest, and (4) unnecessary experience and bonding
requirements.
(h) The institution shall have written selection procedures which
shall provide, as a minimum, the following procedural requirements:
(1) Solicitations of offers, whether by competitive sealed bids or
competitive negotiation, shall:
(i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such
description shall not, in competitive procurements, contain features
which unduly restrict competition. The description may include a
statement of the qualitative nature of the material, product or service
to be procured, and when necessary, shall set forth those minimum
essential characteristics and standards to which it must conform if it
is to satisfy its intended use. Detailed product specifications should
be avoided if at all possible. When it is impractical or uneconomical to
make a clear and accurate description of the technical requirements, a
``brand name or equal'' description may be used as a means to define the
performance or other salient requirements of a procurement. The specific
features of the named brand which must be met by offerors shall be
clearly stated; and
(ii) Clearly set forth all requirements which offerors must fulfill
and all other factors to be used in evaluating bids or proposals.
(2) Awards shall be made only to responsible contractors that
possess the potential ability to perform successfully under the terms
and conditions of a proposed procurement. Consideration shall be given
to such matters as contractor integrity, compliance with public policy,
record of past performance, and financial and technical resources.
(i) Program procurements shall be made by one of the following
methods:
(1) Small purchase procedures are those relatively simple and
informal procurement methods that are sound and appropriate for the
procurement of services, supplies or other property,
[[Page 239]]
costing in the aggregate not more than $10,000. Institutions shall
comply with State or local small purchase dollar limits under $10,000.
If small purchase procedures are used for a procurement under the
Program, price or rate quotation shall be obtained from an adequate
number of qualified sources; or
(2) In competitive sealed bids (formal advertising), sealed bids are
publicly solicited and a firm-fixed-price contract (lump sum or unit
price) is awarded to the responsible bidder whose bid, conforming with
all the material terms and conditions of the invitation for bids, is
lowest in price.
(i) In order for formal advertising to be feasible, appropriate
conditions must be present, including as a minimum, the following:
(A) A complete, adequate and realistic specification or purchase
description is available.
(B) Two or more responsible suppliers are willing and able to
compete effectively for the institution's business.
(C) The procurement lends itself to a firm-fixed price contract, and
selection of the successful bidder can appropriately be made principally
on the basis of price.
(ii) If formal advertising is used for a procurement under the
Program, the following requirements shall apply:
(A) A sufficient time prior to the date set for opening of bids,
bids shall be solicited from an adequate number of known suppliers. In
addition, the invitation shall be publicly advertised.
(B) The invitation for bids, including specifications and pertinent
attachments, shall clearly define the items or services needed in order
for the bidders to properly respond to the invitation.
(C) All bids shall be opened publicly at the time and place stated
in the invitation for bids.
(D) A firm-fixed-price contract award shall be made by written
notice to that responsible bidder whose bid, conforming to the
invitation for bids, is lowest. Where specified in the bidding
documents, factors such as discounts, transportation costs and life
cycle costs shall be considered in determining which bid is lowest.
Payment discounts may only be used to determine low bid when prior
experience of the grantee indicates that such discounts are generally
taken.
(E) Any or all bids may be rejected when there are sound documented
business reasons in the best interest of the Program.
(3) In competitive negotiation, proposals are requested from a
number of sources and the Request for Proposal is publicized.
Negotiations are normally conducted with more than one of the sources
submitting offers, and either a fixed-price or cost-reimbursable type
contract is awarded, as appropriate. Competitive negotiation may be used
if conditions are not appropriate for the use of formal advertising. If
competitive negotiation is used for a procurement under a grant, the
following requirements shall apply:
(i) Proposals shall be solicited from an adequate number of
qualified sources to permit reasonable competition consistent with the
nature and requirements of the procurement. The Request for Proposals
shall be publicized and reasonable requests by other sources to compete
shall be honored to the maximum extent practicable:
(ii) The Request for Proposal shall identify all significant
evaluation factors, including price or cost where required and their
relative importance;
(iii) The institution shall provide mechanisms for technical
evaluation of the proposal received, determinations of responsible
offerors for the purpose of written or oral discussions, and selection
for contract award; and
(iv) Award may be made to the responsible offeror whose proposal
will be most advantageous to the procuring party, price and other
factors considered. Unsuccessful offerors should be notified promptly.
(4) Noncompetitive negotiation is procurement through solicitation
of a proposal from only one source, or after solicitation of a number of
sources, competition is determined inadequate. Noncompetitive
negotiation may be used when the award of a contract is infeasible under
small purchase, competitive bidding (formal advertising), or competitive
negotiation procedures. Circumstances under which a contract may be
awarded by noncompetitive negotiation are limited to the following:
[[Page 240]]
(i) The item is available only from a single source;
(ii) Public exigency or emergency when the urgency for the
requirement will not permit a delay incident to competitive
solicitation;
(iii) FNS authorizes noncompetitive negotiation; or
(iv) After solicitation of a number of sources, competition is
determined inadequate.
(j) The cost plus a percentage of cost method of contracting shall
not be used. Instructions shall perform some form of cost or price
analysis in connection with every procurement action including contract
modifications. Costs or prices based on estimated costs for contracts
under the Program shall be allowed only to the extent that costs
incurred or cost estimates included in negotiated prices are consistent
with Federal cost principles.
(k) Institutions shall maintain rec ords sufficient to detail the
significant history of a procurement. These records shall include, but
are not necessarily limited to information pertinent to the following:
rationale for the method of procurement, selection of contract type,
contractor selection or rejection, and the basis for the cost or price.
(l) In addition to provisions defining a sound and complete
procurement contract, institutions shall include the following contract
provisions or conditions in all procurement contracts and subcontracts
as required by the provision, Federal Law or FNS:
(1) Contracts other than small purchases shall contain provisions or
conditions which will allow for administrative, contractual, or legal
remedies in instances where contractors violate or breach contract
terms, and provide for such sanctions and penalties as may be
appropriate;
(2) All contracts in excess of $10,000 shall contain suitable
provisions for termination by the institution including the manner by
which it will be effected and the basis for settlement. In addition,
such contracts shall describe conditions under which the contract may be
terminated for default as well as conditions where the contract may be
terminated because of circumstances beyond the control of the
contractor;
(3) All contracts awarded in excess of $10,000 by institutions and
their contractors shall contain a provision requiring compliance with
Executive Order 11246, entitled ``Equal Employment Opportunity,'' as
amended by Executive Order 11375, and as supplemented in Department of
Labor regulations (41 CFR part 60);
(4) Where applicable, all contracts awarded by institutions in
excess of $2,500 which involve the employment of mechanics or laborers
shall include a provision for compliance with section 103 of the
Contract Work Hours and Safety Standards Act (40 U.S.C. 327 through 330)
as supplemented by Department of Labor regulations (29 CFR part 5).
Under section 103 of the Act, each contractor shall be required to
compute the wages of every mechanic and laborer on the basis of a
standard work day of 8 hours and a standard work week of 40 hours. Work
in excess of the standard work day or week is permissible provided that
the worker is compensated at a rate of not less than 1\1/2\ times the
basic rate of pay for all hours worked in excess of 8 hours in any
calendar day or 40 hours in the work week. These requirements do not
apply to the purchases of supplies or materials or articles ordinarily
available on the open market, or contracts for transportation or
transmission of intelligence;
(5) The contract shall include notice of USDA requirements and
regulations pertaining to reporting and patent rights under any contract
involving research, developmental, experimental or demonstration work
with respect to any discovery or invention which arises or is developed
in the course of or under such contract, and of USDA requirements and
regulations pertaining to copyrights and rights in data. These
requirements are in Sec. 3015.175 of the USDA Uniform Federal
Assistance Regulations 7 CFR part 3015. All negotiated contracts (except
those awarded by small purchases procedures) awarded by institutions
shall include a provision to the effect that the institution, FNS, the
Comptroller General of the United States or any of their duly authorized
representatives,
[[Page 241]]
shall have access to any books, documents, papers, and records of the
contractor which are directly pertinent to that specific contract, for
the purpose of making audit, examination, excerpts, and transcriptions.
Institutions shall require contractors to maintain all required records
for three years after institutions make final payment and all other
pending matters are closed;
(6) Contracts and subcontracts of amounts in excess of $100,000
shall contain a provision which requires compliance with all applicable
standards, orders, or requirements issued under section 306 of the Clean
Air Act (42 U.S.C. 1837(h)), section 508 of the Clean Water Act (33
U.S.C. 1368), Executive Order 11738, and Environmental Protection Agency
regulations (40 CFR part 15), which prohibit the use under nonexempt
Federal contracts, grants or loans of facilities included on the EPA
List of Violating Facilities. The provision shall require reporting of
violations to FNS and to the U.S. EPA Assistant Administrator for
Enforcement (EN-329); and
(7) Contracts shall recognize mandatory standards and policies
relating to energy efficiency which are contained in the State energy
efficiency conservation plan issued in compliance with the Energy Policy
and Conservation Act (Pub. L. 94-163).
(m) Institutions shall maintain a contract administration system
insuring that contractors perform in accordance with the terms,
conditions, and specifications of their contracts or purchase orders.
Sec. 226.23 Free and reduced-price meals.
(a) The State agency must not enter into a Program agreement with a
new institution until the institution has submitted, and the State
agency has approved, a written policy statement concerning free and
reduced-price meals to be used in all child and adult day care
facilities under its jurisdiction, as described in paragraph (b) of this
section. The State agency must not require an institution to revise its
free and reduced-price policy statement or its nondiscrimination
statement unless the institution makes a substantive change to either
policy. Pending approval of a revision to these statements, the existing
policy must remain in effect.
(b) Sponsoring organizations of day care homes (which may not serve
meals at a separate charge to children) and other institutions which
elect to serve meals at no separate charge, shall develop a policy
statement consisting of an assurance to the State agency that all
participants are served the same meals at no separate charge, regardless
of race, color, national origin, sex, age, or handicap and that there is
no discrimination in the course of the food service. This statement
shall also contain an assurance that there will be no identification of
children in day care homes in which meals are reimbursed at both the
tier I and tier II reimbursement rates, and that the sponsoring
organization will not make any free and reduced price eligibility
information concerning individual households available to day care homes
and will otherwise limit the use of such information to persons directly
connected with the administration and enforcement of the Program.
(c) Independent centers and sponsoring organizations of centers
which charge separately for meals shall develop a policy statement for
determining eligibility for free and reduced-price meals which shall
include the following:
(1) The specific criteria to be used in determining eligibility for
free and reduced-price meals. The institution's standards of eligibility
shall conform to the Secretary's income standards;
(2) A description of the method or methods to be used in accepting
applications from families for free and reduced-price meals. Such
methods will ensure that applications are accepted from households on
behalf of children who are TANF recipients or who are members of food
stamp or FDPIR households or, for adult participants, who are members of
a food stamp or FDPIR household or SSI or Medicaid participants;
(3) A description of the method or methods to be used to collect
payments from those participants paying the full or reduced price of the
meal which will
[[Page 242]]
protect the anonymity of the participants receiving a free or reduced-
price meal;
(4) An assurance which provides that the institution will establish
a hearing procedure for use when benefits are denied or terminated as a
result of verification:
(i) A simple, publicly announced method for a family to make an oral
or written request for a hearing;
(ii) An opportunity for the family to be assisted or represented by
an attorney or other person in presenting its appeal;
(iii) An opportunity to examine, prior to and during the hearing,
the documents and records presented to support the decision under
appeal;
(iv) That the hearing shall be held with reasonable promptness and
convenience to the family and that adequate notice shall be given to the
family as to the time and place of the hearing;
(v) An opportunity for the family to present oral or documentary
evidence and arguments supporting its position;
(vi) An opportunity for the family to question or refute any
testimony or other evidence and to confront and cross-examine any
adverse witnesses;
(vii) That the hearing shall be conducted and the determination made
by a hearing official who did not participate in making the initial
decision;
(viii) The determination of the hearing official shall be based on
the oral and documentary evidence presented at the hearing and made a
part of that hearing record;
(ix) That the family and any designated representatives shall be
notified in writing of the decision of the hearing official;
(x) That a written record shall be prepared with respect to each
hearing, which shall include the decision under appeal, any documentary
evidence and a summary of any oral testimony presented at the hearing,
the decision of the hearing official, including the reasons therefor,
and a copy of the notification to the family of the decision of the
hearing official; and
(xi) That such written record of each hearing shall be preserved for
a period of three years and shall be available for examination by the
family or its representatives at any reasonable time and place during
such period;
(5) An assurance that there will be no overt identification of free
and reduced-price meal recipients and no discrimination against any
participant on the basis of race, color, national origin, sex, age, or
handicap;
(6) An assurance that the charges for a reduced-price lunch or
supper will not exceed 40 cents, that the charge for a reduced-price
breakfast will not exceed 30 cents, and that the charge for a reduced-
price supplement will not exceed 15 cents.
(d) Each institution shall annually provide the information media
serving the area from which the institution draws its attendance with a,
unless the State agency has issued a Statewide media release on behalf
of all institutions. All media releases issued by institutions other
than sponsoring organizations of day care homes, shall include the
Secretary's Income Eligibility Guidelines for Free and Reduced-Price
Meals. The release issued by all sponsoring organizations of day care
homes, and by other institutions which elect not to charge separately
for meals, shall announce the availability of meals at no separate
charge. The release issued by child care institutions which charge
separately for meals shall announce the availability of free and
reduced-price meals to children meeting the approved eligibility
criteria. The release issued by child care institutions shall also
announce that children who are TANF recipients, food stamp or FDPIR
households, or are Head Start participants are automatically eligible to
receive free meal benefits. The release issued by adult day care centers
which charge separately for meals shall announce the availability of
free and reduced-price meals to participants meeting the approved
eligibility criteria. The release issued by adult day care centers shall
also announce that adult participants who are members of food stamp or
FDPIR households or who are SSI or Medicaid participants are
automatically eligible to receive free meal benefits. All releases shall
state that meals are available to all participants without regard to
race, color, national origin, sex, age or handicap.
[[Page 243]]
(e)(1) Application for free and reduced-price meals. (i) For the
purpose of determining eligibility for free and reduced price meals,
institutions shall distribute applications for free and reduced price
meals to the families of participants enrolled in the institution.
Sponsoring organizations of day care homes shall distribute applications
for free and reduced price meals to day care home providers who wish to
enroll their own eligible children in the Program. At the request of a
provider in a tier II day care home, sponsoring organizations of day
care homes shall distribute applications for free and reduced price
meals to the households of all children enrolled in the home, except
that applications need not be distributed to the households of enrolled
children that the sponsoring organization determines eligible for free
and reduced price meals under the circumstances described in paragraph
(e)(1)(vi) of this section. These applications, and any other
descriptive material distributed to such persons, shall contain only the
family-size income levels for reduced price meal eligibility with an
explanation that households with incomes less than or equal to these
levels are eligible for free or reduced price meals. Such forms and
descriptive materials may not contain the income standards for free
meals. However, such forms and materials distributed by child care
institutions other than sponsoring organizations of day care homes shall
state that, if a child is a member of a food stamp or FDPIR household or
is a TANF recipient, the child is automatically eligible to receive free
Program meal benefits, subject to the completion of the application as
described in paragraph (e)(1)(ii) of this section; such forms and
materials distributed by sponsoring organizations of day care homes
shall state that, if a child or a child's parent is participating in or
subsidized under a Federally or State supported child care or other
benefit program with an income eligibility limit that does not exceed
the eligibility standard for free or reduced price meals, meals served
to the child are automatically eligible for tier I reimbursement,
subject to the completion of the application as described in paragraph
(e)(1)(ii) of this section, and shall list any programs identified by
the State agency as meeting this standard; such forms and materials
distributed by adult day care centers shall state that, if an adult
participant is a member of a food stamp or FDPIR household or is a SSI
or Medicaid participant, the adult participant is automatically eligible
to receive free Program meal benefits, subject to the completion of the
application as described in paragraph (e)(1)(iii) of this section.
Sponsoring organizations of day care homes shall not make free and
reduced price eligibility information concerning individual households
available to day care homes and shall otherwise limit the use of such
information to persons directly connected with the administration and
enforcement of the Program. However, sponsoring organizations may inform
tier II day care homes of the number of identified income-eligible
enrolled children. If a State agency distributes, or chooses to permit
its sponsoring organizations to distribute, applications to the
households of children enrolled in tier II day care homes which include
household confidentiality waiver statements, such applications shall
include a statement informing households that their participation in the
program is not dependent upon signing the waivers. Furthermore, such
forms and materials distributed by child care institutions shall state
that if a child is a Head Start participant, the child is automatically
eligible to receive free Program meal benefits, subject to submission by
Head Start officials of a Head Start statement of income eligibility or
income eligibility documentation.
(ii) Except as provided in paragraph (e)(1)(iv) of this section, the
application for children shall contain a request for the following
information:
(A) The names of all children for whom application is made;
(B) The names of all other household members;
(C) The social security number of the adult household member who
signs the application, or an indication that he/she does not possess a
social security number;
(D) The income received by each household member identified by
source
[[Page 244]]
of income (such as earnings, wages, welfare, pensions, support payments,
unemployment compensation, social security, and other cash income
received or withdrawn from any other source, including savings,
investments, trust accounts, and other resources);
(E) A statement to the effect that ``In certain cases, foster
children are eligible for free and reduced-price meals regardless of
household income. If such children are living with you and you wish to
apply for such meals, please contact us.'';
(F) A statement that includes substantially the following
information: ``Unless you include your child's case number for the Food
Stamp Program, the Food Distribution Program on Indian Reservations (or
other identifier for the Food Distribution Program on Indian
Reservations) or the Temporary Assistance for Needy Families Program,
you must include the social security number of the adult household
member signing the application or indicate that the household member
does not have a social security number. This is required by section 9 of
the National School Lunch Act. The social security number is not
mandatory, but the application cannot be approved if a social security
number is not given or an indication is not made that the signer does
not have a social security number. The social security number will be
used in the administration and enforcement of the program.'' State
agencies and institutions must ensure that the notice complies with
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note); and
(G) The signature of an adult member of the household which appears
immediately below a statement that the person signing the application
certifies that all information furnished is true and correct; that the
application is being made in connection with the receipt of Federal
funds; that Program officials may verify the information on the
application; and that the deliberate misrepresentation of any of the
information on the application may subject the applicant to prosecution
under applicable State and Federal criminal statutes.
(iii) Except as provided in paragraph (e)(1)(v) of this section, the
application for adults shall contain a request for the following
information:
(A) The names of all adults for whom application is made;
(B) The names of all other household members;
(C) The social security number of the adult household member who
signs the application, or an indication that he/she does not possess a
social security number;
(D) The income received by source of income (such as earnings,
wages, welfare, pensions, support payments, unemployment compensation,
social security, and other cash income received or withdrawn from any
other source, including savings, investments, trust accounts and other
resources);
(E) A statement which includes substantially the following
information: ``Section 9 of the National School Lunch Act requires that,
unless a food stamp, or FDPIR case number or SSI or Medicaid assistance
identification number is provided for the adult for whom benefits are
sought, you must include a social security number on the application.
This must be the social security number of the adult household member
signing the application. If the adult household member signing the
application does not possess a social security number, he/she must
indicate so on the application. Provision of a social security number is
not mandatory, but if a social security number is not provided or an
indication is not made that the adult household member signing the
application does not have one, the application cannot be approved. This
notice must be brought to the attention of the household member whose
social security number is disclosed. The social security number may be
used to identify the household member in carrying out efforts to verify
the correctness of information stated on the application. These
verification efforts may be carried out through program reviews, audits
and investigations and may include contacting employers to determine
income, contacting a food stamp, Indian tribal organization or welfare
office to determine current certification for receipt of food stamps or
FDPIR benefits, contacting the issuing office of SSI or Medicaid
benefits to determine current
[[Page 245]]
certification for receipt of these benefits, contacting the State
employment security office to determine the amount of benefits received,
and checking the documentation produced by household members to provide
the amount of income received. These efforts may result in loss or
reduction of benefits, administrative claims or legal action if
incorrect information is reported.'' State agencies and institutions
shall ensure that the notice complies with section 7 of Pub. L. 93-579.
If a State or local agency plans to use the social security numbers for
CCFP verification purposes in a manner not described by this notice, the
notice shall be altered to include a description of those uses; and
(F) The signature of an adult member of the household which appears
immediately below a statement that the person signing the application
certifies that all information furnished is true and correct; that the
application is being made in connection with the receipt of Federal
funds; that Program officials may verify the information on the
application; and that the deliberate misrepresentation of any of the
information on the application may subject the applicant to prosecution
under applicable State and Federal criminal statutes.
(iv) If they so desire, households applying on behalf of children
who are members of food stamp or FDPIR households who are TANF
recipients may apply under this paragraph rather than under the
procedures described in paragraph (e)(1)(ii) of this section. In
addition, households of children enrolled in tier II day care homes who
are participating in a Federally or State supported child care or other
benefit program with an income eligibility limit that does not exceed
the eligibility standard for free and reduced price meals may apply
under this paragraph rather than under the procedures described in
paragraph (e)(1)(ii) of this section. Households applying on behalf of
children who are 0members of food stamp or FDPIR households; children
who are TANF recipients; or for children enrolled in tier II day care
homes, other qualifying Federal or State program, shall be required to
provide:
(A) For the child(ren) for whom automatic free meal eligibility is
claimed, their names and food stamp, FDPIR, or TANF case number; or for
the households of children enrolled in tier II day care homes, their
names and other program case numbers (if the program utilizes case
numbers); and
(B) The signature of an adult member of the household as provided
for in paragraph (e)(1)(ii)(G) of this section. In accordance with
paragraph (e)(1)(ii)(F) of this section, if a case number is provided,
it may be used to verify the current certification for the child(ren)
for whom free meal benefits are claimed. Whenever households apply for
children not receiving food stamp, FDPIR, or TANF benefits; or for tier
II homes, other qualifying Federal or State program benefits, they must
apply in accordance with the requirements set forth in paragraph
(e)(1)(ii) of this section.
(v) If they so desire, households applying on behalf of adults who
are members of food stamp or FDPIR households or SSI or Medicaid
participants may apply for free meal benefits under this paragraph
rather than under the procedures described in paragraph (e)(1)(iii) of
this section. Households applying on behalf of adults who are members of
food stamp or FDPIR households or SSI or Medicaid participants shall be
required to provide:
(A) The names and food stamp or FDPIR case numbers or SSI or
Medicaid assistance identification numbers of the adults for whom
automatic free meal eligibility is claimed; and
(B) The signature of an adult member of the household as provided in
paragraph (e)(1)(iii)(F) of this section. In accordance with paragraph
(e)(1)(iii)(G) of this section, if a food stamp or FDPIR case number or
SSI or Medicaid assistance identification number is provided, it may be
used to verify the current food stamp, FDPIR, SSI, or Medicaid
certification for the adult(s) for whom free meal benefits are being
claimed. Whenever households apply for benefits for adults not receiving
food stamp, FDPIR, SSI, or Medicaid benefits, they must apply in
accordance with the requirements set forth in paragraph (e)(1)(iii) of
this section.
[[Page 246]]
(vi) A sponsoring organization of day care homes may identify
enrolled children eligible for free and reduced price meals (i.e., tier
I rates), without distributing free and reduced price applications, by
documenting the child's or household's participation in or receipt of
benefits under a Federally or State supported child care or other
benefit program with an income eligibility limit that does not exceed
the eligibility standard for free and reduced price meals. Documentation
shall consist of official evidence, available to the tier II day care
home or sponsoring organization, and in the possession of the sponsoring
organization, of the household's participation in the qualifying
program.
(2) Letter to households. Institutions shall distribute a letter to
households or guardians of enrolled participants in order to inform them
of the procedures regarding eligibility for free and reduced-price
meals. The letter shall accompany the application required under
paragraph (e)(1) of this section and shall contain:
(i) The income standards for reduced-price meals, with an
explanation that households with incomes less than or equal to the
reduced-price standards would be eligible for free or reduced-price
meals (the income standards for free meals shall not be included in
letters or notices to such applicants);
(ii) How a participant's household may make application for free or
reduced-price meals;
(iii) An explanation that an application for free or reduced price
benefits cannot be approved unless it contains complete
``documentation'' as defined in Sec. 226.2.
(iv) The statement: ``In the operation of child feeding programs, no
person will be discriminated against because of race, color, national
origin, sex, age, or handicap'';
(v) A statement to the effect that participants having family
members who become unemployed are eligible for free or reduced-price
meals during the period of unemployment, provided that the loss of
income causes the family income during the period of unemployment to be
within the eligibility standards for those meals;
(vi) Except in the case of adult participants, a statement to the
effect that in certain cases foster children are eligible for free or
reduced-price meals regardless of the income of such household with whom
they reside and that households wishing to apply for such benefits for
foster children should contact the institution; and
(vii) An explanation that households receiving free and reduced-
price meals must notify appropriate institution officials during the
year of any decreases in household size or increases in income of over
$50 per month or $600 per year or--
(A) In the case of households of enrolled children that provide a
food stamp, FDPIR or TANF case number to establish a child's eligibility
for free meals, any termination in the child's certification to
participate in the Food Stamp, FDPIR or TANF Programs, or
(B) In the case of households of adult participants that provide a
food stamp or FDPIR case number or an SSI or Medicaid assistance
identification number to establish an adult's eligibility for free
meals, any termination in the adult's certification to participate in
the Food Stamp, FDPIR, SSI or Medicaid Programs.
(3) In addition to the information listed in paragraph (e)(2) of
this section pricing institutions must include in their letter to
household an explanation that indicates that: (i) The information in the
application may be verified at any time during the year; and (ii) how a
family may appeal a decision of the institution to deny, reduce, or
terminate benefits as described under the hearing procedure set forth in
paragraph (c)(4) of this section.
(4) Determination of eligibility. The institution shall take the
income information provided by the household on the application and
calculate the household's total current income. When a completed
application furnished by a family indicates that the family meets the
eligibility criteria for free or reduced-price meals, the participants
from that family shall be determined eligible for free or reduced-price
meals. Institutions that are pricing programs shall promptly provide
[[Page 247]]
written notice to each family informing them of the results of the
eligibility determinations. When the information furnished by the family
is not complete or does not meet the eligibility criteria for free or
reduced-price meals, institution officials must consider the
participants from that family as not eligible for free or reduced-price
meals, and must consider the participants as eligible for ``paid''
meals. When information furnished by the family of participants enrolled
in a pricing program does not meet the eligibility criteria for free or
reduced-price meals, pricing program officials shall provide written
notice to each family denied free or reduced-price benefits. At a
minimum, this notice shall include:
(i) The reason for the denial of benefits, e.g., income in excess of
allowable limits or incomplete application;
(ii) Notification of the right to appeal;
(iii) Instructions on how to appeal; and
(iv) A statement reminding the household that they may reapply for
free or reduced-price benefits at any time during the year,
The reasons for ineligibility shall be properly documented and retained
on file at the institution.
(5) Appeals of denied benefits. A family that wishes to appeal the
denial of an application in a pricing program shall do so under the
hearing procedures established under paragraph (c)(4) of this section.
However, prior to initiating the hearing procedures, the household may
request a conference to provide all affected parties the opportunity to
discuss the situation, present information and obtain an explanation of
the data submitted on the application or the decision rendered. The
request for a conference shall not in any way prejudice or diminish the
right to a fair hearing. The institution shall promptly schedule a fair
hearing, if requested.
(f) Free, reduced-price and paid meal eligibility figures must be
reported by institutions to State agencies at least once each year and
shall be based on current family-size and income information of enrolled
participants. Such information shall be no more than 12 months old.
(g) Sponsoring organizations for family day care homes shall ensure
that no separate charge for food service is imposed on families of
children enrolled in participating family day care homes.
(h) Verification of eligibility. State agencies shall conduct
verification of eligibility for free and reduced-price meals on an
annual basis, in accordance with the verification procedures outlined in
paragraphs (h) (1) and (2) of this section. Verification may be
conducted in accordance with Program assistance requirements of Sec.
226.6(m); however, the performance of verification for individual
institutions shall occur no less frequently than once every three years.
Any State may, with the written approval of FNSRO, use alternative
approaches in the conduct of verification, provided that the results
achieved meet the requirements of this part. If the verification process
discloses deficiencies with the determination of eligibility and/or
application procedures which exceed maximum levels established by FNS,
State agencies shall conduct follow-up reviews for the purpose of
determining that corrective action has been taken by the institution.
These reviews shall be conducted within one year of the date the
verification process was completed. The verification effort shall be
applied without regard to race, color, national origin, sex, age, or
handicap. State agencies shall maintain on file for review a description
of the annual verification to be accomplished in order to demonstrate
compliance with paragraphs (h) (1) and (2) of this section.
(1) Verification procedures for nonpricing programs. Except for
sponsoring organizations of family day care homes, State agency
verification procedures for nonpricing programs shall consist of a
review of all approved free and reduced price applications on file. For
sponsoring organizations of family day care homes, State agency
verification procedures shall consist of a review only of the approved
free and reduced price applications (or other documentation, if vouchers
or other documentation are used in lieu of free and reduced price
applications) on file
[[Page 248]]
for those day care homes that are required to be reviewed when the
sponsoring organization is reviewed, in accordance with the review
requirements set forth in Sec. 226.6(m). However, the State agency
shall ensure that the day care homes selected for review are
representative of the proportion of tier I, tier II, and tier II day
care homes with a mix of income-eligible and non-income-eligible
children in the sponsorship, and shall ensure that at least 10 percent
of all free and reduced price applications (or other documentation, if
applicable) on file for the sponsorship are verified. The review of
applications shall ensure that:
(i) The application has been correctly and completely executed by
the household;
(ii) The institution has correctly determined and classified the
eligibility of enrolled participants for free or reduced price meals or,
for family day care homes, for tier I or tier II reimbursement, based on
the information included on the application submitted by the household;
(iii) The institution has accurately reported to the State agency
the number of enrolled participants meeting the criteria for free or
reduced price meal eligibility or, for day care homes, the number of
participants meeting the criteria for tier I reimbursement, and the
number of enrolled participants that do not meet the eligibility
criteria for those meals; and
(iv) In addition, the State agency may conduct further verification
of the information provided by the household on the approved application
for program meal eligibility. If this effort is undertaken, the State
agency shall conduct this further verification for nonpricing programs
in accordance with the procedures described in paragraph (h)(2) of this
section.
(2) Verification procedures for pricing programs. (i) For pricing
programs, in addition to the verification procedures described in
paragraph (h)(1) of this section, State agencies shall also conduct
verification of the income information provided on the approved
application for free and reduced price meals and, at State agency
discretion, verification may also include confirmation of other
information required on the application. However,
(A) If a food stamp, FDPIR or TANF case number is provided for a
child, verification for such child shall include only confirmation that
the child is included in a currently certified food stamp or FDPIR
household or is a TANF recipient; or
(B) If a food stamp or FDPIR case number or SSI or Medicaid
assistance identification number is provided for an adult, verification
for such adult shall include only confirmation that the adult is
included in a currently certified food stamp or FDPIR household or is
currently certified to receive SSI or Medicaid benefits.
(ii) State agencies shall perform verification on a random sample of
no less than 3 percent of the approved free and reduced price
applications in an institution which is a pricing program.
(iii) Households shall be informed in writing that they have been
selected for verification and they are required to submit the requested
verification information to confirm their eligibility for free or
reduced-price benefits by such date as determined by the State agency.
Those households shall be informed of the type or types of information
and/or documents acceptable to the State agency and the name and phone
number of an official who can answer questions and assist the household
in the verification effort. This information must include a social
security number for each adult household member or an indication that
he/she does not have one. State agencies shall inform selected
households that:
(A) Section 9 of the National School Lunch Act requires that, unless
households provide the child's food stamp, FDPIR or TANF case number, or
the adult participant's food stamp or FDPIR case number or SSI or
Medicaid assistance identification number, those selected for
verification must provide the social security number of each adult
household member;
(B) In lieu of providing a social security number, an adult
household member may indicate that he/she does not possess one;
(C) Provision of a social security number is not mandatory, but if a
social security number is not provided
[[Page 249]]
for each adult household member or an indication is not made that he/she
does not possess one, benefits will be terminated;
(D) The social security number may be used to identify household
members in carrying out efforts to verify the correctness of information
stated on the application and continued eligibility for the program.
These verification efforts may be carried out through program reviews,
audits, and investigations and may include contacting employers to
determine income, contacting Federal, State or local agencies to
determine current certification for receipt of food stamps or FDPIR,
TANF, SSI or Medicaid benefits, contacting the State employment security
office to determine the amount of benefits received, and checking the
documentation produced by household members to prove the amount of
income received. These efforts may result in loss or reduction of
benefits, administrative claims or legal actions if incorrect
information was reported; and
(E) This information must be provided to the attention of each adult
household member disclosing his/her social security number. State
agencies shall ensure that the notice complies with section 7 of Pub. L.
93-579 (Privacy Act of 1974). These households shall be provided with
the name and phone number of an official who can assist in the
verification effort.
(iv) Households of enrolled children selected for verification shall
also be informed that if they are currently certified to participate in
the Food Stamp, FDPIR, or TANF Program they may submit proof of that
certification in lieu of income information. In those cases, such proof
shall consist of a current ``Notice of Eligibility'' for Food Stamp,
FDPIR, or TANF Program benefits or equivalent official documentation
issued by a food stamp, Indian Tribal Organization, or welfare office
which shows that the children are members of households or assistance
units currently certified to participate in the Food Stamp, FDPIR, or
TANF Programs. An identification card for any of these programs is not
acceptable as verification unless it contains an expiration date.
Households of enrolled adults selected for verification shall also be
informed that if they are currently certified to participate in the Food
Stamp Program or FDPIR or SSI or Medicaid Programs, they may submit
proof of that certification in lieu of income information. In those
cases, such proof shall consist of:
(A) A current ``Notice of Eligibility'' for Food Stamp or FDPIR
benefits or equivalent official documentation issued by a food stamp,
Indian Tribal Organization, or welfare office which shows that the adult
participant is a member of a household currently certified to
participate in the Food Stamp Program or FDPIR. An identification card
is not acceptable as verification unless it contains an expiration date;
or
(B) Official documentation issued by an appropriate SSI or Medicaid
office which shows that the adult participant currently receives SSI or
Medicaid assistance. An identification card is not acceptable as
verification unless it contains an expiration date. All households
selected for verification shall be advised that failure to cooperate
with verification efforts will result in a termination of benefits.
(v) Sources of information for verification may include written
evidence, collateral contacts, and/or systems of records.
(A) Written evidence shall be used as the primary source of
information for verification. Written evidence includes written
confirmation of a household's circumstances, such as wage stubs, award
letters, letters from employers, and, for enrolled children, current
certification to participate in the Food Stamp, FDPIR or TANF Programs,
or, for adult participants, current certification to participate in the
Food Stamp, FDPIR, SSI or Medicaid Programs. Whenever written evidence
is insufficient to confirm eligibility, the State agency may use
collateral contacts.
(B) Collateral contact is a verbal confirmation of a household's
circumstances by a person outside of the household. The collateral
contact may be made in person or by phone and shall be authorized by the
household. The verifying official may select a collateral contact if the
household fails to
[[Page 250]]
designate one or designates one which is unacceptable to the verifying
official. If the verifying official designates a collateral contact, the
contact shall not be made without providing written or oral notice to
the household. At the time of this notice, the household shall be
informed that it may consent to the contact or provide acceptable
verification in another form. The household shall be informed that its
eligibility for free or reduced price meals shall be terminated if it
refuses to choose one of these options. Termination shall be made in
accordance with paragraph (h)(2)(vii) of this section. Collateral
contacts could include employers, social service agencies, and migrant
agencies.
(C) Systems of records to which the State agency may have routine
access are not considered collateral contacts. Information concerning
income, family size, or food stamp/FDPIR/TANF certification for enrolled
children, or food stamp/FDPIR/SSI/Medicaid certification for enrolled
adults, which is maintained by other government agencies and to which a
State agency can legally gain access may be used to confirm a
household's eligibility for Program meal benefits. One possible source
could be wage and benefit information maintained by the State
unemployment agency, if that information is available. The use of any
information derived from other agencies must be used with applicable
safeguards concerning disclosure.
(vi) Verification by State agencies of receipt of food stamps,
FDPIR, TANF, SSI or Medicaid benefits shall be limited to a review to
determine that the period of eligibility is current. If the benefit
period is found to have expired, or if the household's certification has
been terminated, the household shall be required to document their
income eligibility.
(vii) The State agency may work with the institution to verify the
documentation submitted by the household on the application; however,
the responsibility to complete the verification process may not be
delegated to the institution.
(viii) If a household refuses to cooperate with efforts to verify,
or the verification of income indicates that the household is ineligible
to receive benefits or is eligible to receive reduced benefits, the
State agency shall require the pricing program institution to terminate
or adjust eligibility in accordance with the following procedures.
Institution officials shall immediately notify families of the denial of
benefits in accordance with paragraphs (e)(4) and (e)(5) of this
section. Advance notification shall be provided to families which
receive a reduction or termination of benefits 10 calendar days prior to
the actual reduction or termination. The 10-day period shall begin the
day the notice is transmitted to the family. The notice shall advise the
household of: (A) The change; (B) the reasons for the change; (C)
notification of the right to appeal the action and the date by which the
appeal must be requested in order to avoid a reduction or termination of
benefits; (D) instructions on how to appeal; and (E) the right to
reapply at any time during the year. The reasons for ineligibility shall
be properly documented and retained on file at the institution.
(ix) When a household disagrees with an adverse action which affects
its benefits and requests a fair hearing, benefits shall be continued as
follows while the household awaits the hearing:
(A) Households which have been approved for benefits and which are
subject to a reduction or termination of benefits later in the same year
shall receive continued benefits if they appeal the adverse action
within the 10-day advance notice period; and
(B) Households which are denied benefits upon application shall not
received benefits.
(3) State agencies shall inform institution officials of the results
of the verification effort and the action which will be taken in
response to the verification findings. This notification shall be made
in accordance with the procedures outlined in Sec. 226.14(a).
(4) If the verification results disclose that an institution has
inaccurately classified or reported the number of participants eligible
for free, reduced-price or paid meals, the State agency shall adjust
institution rates of reimbursement retroactive to the month in which the
incorrect eligibility figures
[[Page 251]]
were reported by the institution to the State agency.
(5) If the verification results disclose that a household has not
reported accurate documentation on the application which would support
continued eligibility for free or reduced-price meals, the State agency
shall immediately adjust institution rates of reimbursement. However,
this rate adjustment shall not become effective until the affected
households have been notified in accordance with the procedures of
paragraph (h)(2)(vi) of this section and any ensuing appeals have been
heard as specified in paragraph (h)(2)(viii) of this section.
(6) Verification procedures for sponsoring organizations of day care
homes. Prior to approving an application for a day care home that
qualifies as tier I day care home on the basis of the provider's
household income, sponsoring organizations of day care homes shall
conduct verification of such income in accordance with the procedures
contained in paragraph (h)(2)(i) of this section. Sponsoring
organizations of day care homes may verify the information on
applications submitted by households of children enrolled in day care
homes in accordance with the procedures contained in paragraph (h)(2)(i)
of this section.
(i) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP)
Program eligibility information about children eligible for free and
reduced price meals may be disclosed to Medicaid and SCHIP as described
in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow
institutions to disclose children's free and reduced price meal
eligibility information to Medicaid and SCHIP. Institutions may then
elect to do so. Children's program eligibility information may only be
disclosed to Medicaid or SCHIP when both the State agency and the
institution so elect, the parent/guardian does not decline to have their
eligibility information disclosed as described in paragraph (i)(5), and
the requirements in this paragraph (i) are met.
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or institution, as appropriate, may disclose children's
names, eligibility status (whether they are eligible for free or reduced
price meals), and any other eligibility information obtained through the
free and reduced price meal application to persons directly connected
with the administration of Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration of
Medicaid and SCHIP for purposes of disclosure of children's free and
reduced price meal eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free and reduced price meal eligibility information? Medicaid
and SCHIP agencies and health insurance program operators receiving
children's free and reduced price meal eligibility information may only
use the information to seek to enroll children in Medicaid or SCHIP. The
Medicaid and SCHIP enrollment process may include targeting and
identifying children from low-income households who are potentially
eligible for Medicaid or SCHIP for the purpose of seeking to enroll them
in Medicaid or SCHIP.
(5) What are the requirements for notifying households of potential
disclosure to Medicaid or SCHIP? The State agency or institution, as
appropriate, must notify parents/guardians that children's free or
reduced price meal eligibility information will be disclosed to Medicaid
and/or SCHIP unless the parent/guardian elects not to have their
information disclosed. Additionally, the State agency or institution, as
appropriate, must give parents/guardians an opportunity to elect not to
have their information disclosed to Medicaid or SCHIP. Only the parent
or guardian who is a member of the household or
[[Page 252]]
family for purposes of the free and reduced price meal or free milk
application may decline the disclosure of eligibility information. The
notification must inform parents/guardians that they are not required to
consent to the disclosure, that the information, if disclosed, will be
used to identify children eligible for and to seek to enroll children in
a health insurance program, and that their decision will not affect
their children's eligibility for free or reduced price meals. The
notification may be included in the letter/notice to parents/guardians
that accompanies the free and reduced price application, on the
application itself or in a separate notice provided to parents/
guardians. The notice must give parents/guardians adequate time to
respond. For children determined eligible through direct certification,
the notice of potential disclosure may be included in the document
informing parents/guardians of their children's eligibility for free
meals through direct certification.
(6) May social security numbers be disclosed? The State agency or
institution, as appropriate, may disclose social security numbers to any
programs or persons authorized to receive all program eligibility
information under this paragraph (i), provided parents/guardians have
not declined to have their information disclosed. However, State
agencies and institutions that plan to disclose social security numbers
must give notice of the planned use of the social security numbers. This
notice must be in accordance with section 7(b) of the Privacy Act of
1974 (5 U.S.C. 552a note). The application must include substantially
the following language for disclosures of social security numbers to
Medicaid or SCHIP: ``The social security number may also be disclosed to
Medicaid and the State Children's Health Insurance Program for the
purpose of identifying and seeking to enroll eligible children in one of
these health insurance programs.'' This language is in addition to the
notice required in paragraph (e)(1)(i)(F) of this section. State
agencies and institutions are responsible for drafting the appropriate
notice for disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or institution, as appropriate, must have
a written agreement with the State or local agency or agencies
administering Medicaid or SCHIP prior to disclosing children's free and
reduced price eligibility information. At a minimum, the agreement must:
(i) Identify the health insurance program or health agency receiving
children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or institution, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (i) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of children's
free and reduced price meal eligibility information to Medicaid or
SCHIP, as provided in this paragraph (i), must ensure that any
institution acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C.
[[Page 253]]
1396 et seq. and 1397aa et seq.) that requires the health agencies to
use children's free and reduced price meal eligibility information to
seek to enroll children in those health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
[47 FR 36527, Aug. 20, 1982, as amended at 49 FR 14078, Apr. 10, 1984;
50 FR 19310, May 8, 1985; 50 FR 20197, May 15, 1985; 52 FR 36907, Oct.
2, 1987; 53 FR 52594, Dec. 28, 1988; Amdt. 22, 55 FR 1378, Jan. 14,
1990; 61 FR 25555, May 22, 1996; 62 FR 904, Jan. 7, 1997; 62 FR 5519,
Feb. 6, 1997; 62 FR 23619, May 1, 1997; 63 FR 9105, Feb. 24, 1998; 63 FR
9729, Feb. 26, 1998; 66 FR 2203, Jan. 11, 2001; 67 FR 43494, June 27,
2002; 69 FR 53547, Sept. 1, 2004]
Subpart F_Food Service Equipment Provisions
Sec. 226.24 Property management requirements.
Institutions and administering agencies shall follow the policies
and procedures governing title, use, and disposition of equipment
obtained by purchase, whose cost was acquired in whole or part with food
service equipment assistance funds in accordance with the Department's
Uniform Federal Assistance Regulations (7 CFR part 3015).
[48 FR 41142, Sept. 14, 1983]
Subpart G_Other Provisions
Sec. 226.25 Other provisions.
(a) Grant closeout procedures. Grant closeout procedures for the
Program shall be in accordance with the Uniform Federal Assistance
Regulations.
(b) State requirements. Nothing contained in this part shall prevent
a State agency from imposing additional requirements for participation
in the Program which are not inconsistent with the provisions of this
part; however, any additional requirements shall be approved by FNSRO
and may not deny the Program to an eligible institution.
(c) Value of assistance. The value of assistance to participants
under the Program shall not be considered to be income or resources for
any purposes under any Federal or State laws, including, but not limited
to laws relating to taxation, welfare, and public assistance programs.
(d) Maintenance of effort. Expenditure of funds from State and local
sources for the maintenance of food programs for children shall not be
diminished as a result of funds received under the Act.
(e) Fraud penalty. Whoever embezzles, willfully misapplies, steals,
or obtains by fraud any funds, assets, or property that are the subject
of a grant or other form of assistance under this part, whether received
directly or indirectly from the Department or whoever receives,
conceals, or retains such funds, assets, or property to his use or gain,
knowing such funds, assets, or property have been embezzled, willfully
misapplied, stolen, or obtained by fraud shall, if such funds, assets,
or property are of the value of $100 or more, be fined not more than
$10,000 or imprisoned not more than five years, or both, or, if such
funds, assets, or property are of value of less than $100, shall be
fined not more than $1,000 or imprisoned for not more than one year, or
both.
(f) Claims adjustment authority. The Secretary shall have the
authority to determine the amount of, to settle, and to adjust any claim
arising under the Program, and to compromise or deny such claim or any
part thereof. The Secretary shall also have the authority to waive such
claims if the Secretary determines that to do so would serve the
purposes of the program. This provision shall not diminish the authority
of the Attorney General of the United States under section 516 of title
28, U.S. Code, to conduct litigation on behalf of the United States.
[47 FR 36527, Aug. 20, 1982, as amended at 53 FR 52597, Dec. 28, 1988;
54 FR 13049, Mar. 30, 1989; 69 FR 53547, Sept. 1, 2004]
Sec. 226.26 Program information.
Persons desiring information concerning the Program may write to the
appropriate State agency or Regional Office of FNS as indicated below:
[[Page 254]]
(a) In the States of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, and Vermont: Northeast Regional
Office, FNS, U.S. Department of Agriculture, 10 Causeway Street, Room
501, Boston, MA 02222-1065.
(b) In the States of Delaware, District of Columbia, Maryland, New
Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands, and West
Virginia: Mid-Atlantic Regional Office, FNS, U.S. Department of
Agriculture, 300 Corporate Boulevard, Robbinsville, NJ 08691-1598.
(c) In the States of Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina, and Tennessee: Southeast
Regional Office, FNS, U.S. Department of Agriculture, 61 Forsyth Street,
SW., Room 8T36, Atlanta, GA 30303.
(d) In the States of Illinois, Indiana, Michigan, Minnesota, Ohio
and Wisconsin: Midwest Regional Office, FNS, U.S. Department of
Agriculture, 77 Jackson Boulevard, 20th Floor, Chicago, IL 60604-3507.
(e) In the States of Colorado, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah and Wyoming: Mountain Plains
Regional Office, FNS, U.S. Department of Agriculture, 1244 Speer
Boulevard, Suite 903, Denver, CO 80204.
(f) In the States of Arkansas, Louisiana, New Mexico, Oklahoma and
Texas: Southwest Regional Office, FNS, U.S. Department of Agriculture,
1100 Commerce Street, Room 5-C-30, Dallas, TX 75242.
(g) In the States of Alaska, American Samoa, Arizona, California,
Guam, Hawaii, Idaho, Nevada, Oregon, the Commonwealth of the Northern
Mariana Islands, and Washington: Western Regional Office, FNS, U.S.
Department of Agriculture, 550 Kearney Street, Room 400, San Francisco,
CA 94108.
[47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at
48 FR 40197, Sept. 6, 1983; 53 FR 52598, Dec. 28, 1988; 65 FR 12442,
Mar. 9, 2000]
Sec. 226.27 Information collection/recordkeeping--OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control
number
------------------------------------------------------------------------
226.3-226.4................................................ 0584-0055
226.6-226.10............................................... 0584-0055
226.14-226.16.............................................. 0584-0055
226.23-226.24.............................................. 0584-0055
------------------------------------------------------------------------
[50 FR 53258, Dec. 31, 1985]
Appendix A to Part 226--Alternate Foods for Meals
Alternate Protein Products
A. What are the criteria for alternate protein products used in the
Child and Adult Care Food Program?
1. An alternate protein product used in meals planned under the
provisions in Sec. 226.20 must meet all of the criteria in this
section.
2. An alternate protein product whether used alone or in combination
with meat or meat alternate must meet the following criteria:
a. The alternate protein product must be processed so that some
portion of the non-protein constituents of the food is removed. These
alternate protein products must be safe and suitable edible products
produced from plant or animal sources.
b. The biological quality of the protein in the alternate protein
product must be at least 80 percent that of casein, determined by
performing a Protein Digestibility Corrected Amino Acid Score (PDCAAS).
c. The alternate protein product must contain at least 18 percent
protein by weight when fully hydrated or formulated. (``When hydrated or
formulated'' refers to a dry alternate protein product and the amount of
water, fat, oil, colors, flavors or any other substances which have been
added).
d. Manufacturers supplying an alternate protein product to
participating schools or institutions must provide documentation that
the product meets the criteria in paragraphs A.2. through c of this
appendix.
e. Manufacturers should provide information on the percent protein
contained in the dry alternate protein product and on an as prepared
basis.
f. For an alternate protein product mix, manufacturers should
provide information on:
(1) The amount by weight of dry alternate protein product in the
package;
(2) Hydration instructions; and
(3) Instructions on how to combine the mix with meat or other meat
alternates.
[[Page 255]]
B. How are alternate protein products used in the Child and Adult Care
Food Program?
1. Schools, institutions, and service institutions may use alternate
protein products to fulfill all or part of the meat/meat alternate
component discussed in Sec. 226.20.
2. The following terms and conditions apply:
a. The alternate protein product may be used alone or in combination
with other food ingredients. Examples of combination items are beef
patties, beef crumbles, pizza topping, meat loaf, meat sauce, taco
filling, burritos, and tuna salad.
b. Alternate protein products may be used in the dry form
(nonhydrated), partially hydrated or fully hydrated form. The moisture
content of the fully hydrated alternate protein product (if prepared
from a dry concentrated form) must be such that the mixture will have a
minimum of 18 percent protein by weight or equivalent amount for the dry
or partially hydrated form (based on the level that would be provided if
the product were fully hydrated).
C. How are commercially prepared products used in the Child and
Adult Care Food Program?
Schools, institutions, and service institutions may use a
commercially prepared meat or meat alternate product combined with
alternate protein products or use a commercially prepared product that
contains only alternate protein products.
[65 FR 12442, Mar. 9, 2000]
Appendix B to Part 226 [Reserved]
Appendix C to Part 226--Child Nutrition (CN) Labeling Program
1. The Child Nutrition (CN) Labeling Program is a voluntary
technical assistance program administered by the Food and Nutrition
Service (FNS) in conjunction with the Food Safety and Inspection Service
(FSIS), and Agricultural Marketing Service (AMS) of the U.S. Department
of Agriculture (USDA), and National Marine Fisheries Service of the U.S.
Department of Commerce (USDC) for the Child Nutrition Programs. This
program essentially involves the review of a manufacturer's recipe or
product formulation to determine the contribution a serving of a
commercially prepared product makes toward meal pattern requirements and
a review of the CN label statement to ensure its accuracy. CN labeled
products must be produced in accordance with all requirements set forth
in this rule.
2. Products eligible for CN labels are as follows:
(a) Commercially prepared food products that contribute
significantly to the meat/meat alternate component of meal pattern
requirements of 7 CFR 210.10, 225.21, and 226.20 and are served in the
main dish.
(b) Juice drinks and juice drink products that contain a minimum of
50 percent full-strength juice by volume.
3. For the purpose of this appendix the following definitions apply:
(a) CN label is a food product label that contains a CN label
statement and CN logo as defined in paragraph 3 (b) and (c) below.
(b) The CN logo (as shown below) is a distinct border which is used
around the edges of a ``CN label statement'' as defined in paragraph
3(c).
[GRAPHIC] [TIFF OMITTED] TC17SE91.009
(c) The CN label statement includes the following:
(1) The product identification number (assigned by FNS),
(2) The statement of the product's contribution toward meal pattern
requirements of 7 CFR 210.10, 220.8, 225.21, and 226.20. The statement
shall identify the contribution of a specific portion of a meat/meat
alternate product toward the meat/meat alternate, bread/bread alternate,
and/or vegetable/fruit
[[Page 256]]
component of the meal pattern requirements. For juice drinks and juice
drink products the statement shall identify their contribution toward
the vegetable/fruit component of the meal pattern requirements,
(3) Statement specifying that the use of the CN logo and CN
statement was authorized by FNS, and
(4) The approval date.
For example:
[GRAPHIC] [TIFF OMITTED] TC17SE91.010
(d) Federal inspection means inspection of food products by FSIS,
AMS or USDC.
4. Food processors or manufacturers may use the CN label statement
and CN logo as defined in paragraph 3 (b) and (c) under the following
terms and conditions:
(a) The CN label must be reviewed and approved at the national level
by the Food and Nutrition Service and appropriate USDA or USDC Federal
agency responsible for the inspection of the product.
(b) The CN labeled product must be produced under Federal inspection
by USDA or USDC. The Federal inspection must be performed in accordance
with an approved partial or total quality control program or standards
established by the appropriate Federal inspection service.
(c) The CN label statement must be printed as an integral part of
the product label along with the product name, ingredient listing, the
inspection shield or mark for the appropriate inspection program, the
establishment number where appropriate, and the manufacturer's or
distributor's name and address.
(1) The inspection marking for CN labeled non-meat, non-poultry, and
non-seafood products with the exception of juice drinks and juice drink
products is established as follows:
[GRAPHIC] [TIFF OMITTED] TC17SE91.011
(d) Yields for determining the product's contribution toward meal
pattern requirements must be calculated using the Food Buying Guide for
Child Nutrition Programs (Program Aid Number 1331).
5. In the event a company uses the CN logo and CN label statement
inappropriately, the company will be directed to discontinue the use of
the logo and statement and the matter will be referred to the
appropriate agency for action to be taken against the company.
6. Products that bear a CN label statement as set forth in paragraph
3(c) carry a warranty. This means that if a food service authority
participating in the child nutrition programs purchases a CN labeled
product and uses it in accordance with the manufacturer's directions,
the school or institution will not have an audit claim filed against it
for the CN labeled product for noncompliance with the meal pattern
requirements of 7 CFR 210.10, 220.8, 225.21, and 226.20. If a State or
Federal auditor finds that a product that is CN labeled does not
actually meet the meal pattern requirements claimed on the label, the
auditor will report this finding to FNS. FNS will prepare a report of
the findings and send it to the appropriate divisions of FSIS and AMS of
the USDA, National Marine Fisheries Services of the USDC, Food and Drug
Administration, or the Department of Justice for action against the
company.
Any or all of the following courses of action may be taken:
(a) The company's CN label may be revoked for a specific period of
time;
(b) The appropriate agency may pursue a misbranding or mislabeling
action against the company producing the product;
(c) The company's name will be circulated to regional FNS offices;
(d) FNS will require the food service program involved to notify the
State agency of the labeling violation.
7. FNS is authorized to issue operational policies, procedures, and
instructions for the CN Labeling Program.
To apply for a CN label and to obtain additional information on CN
label application procedures write to: CN Labels, U.S. Department of
Agriculture, Food and Nutrition Service, Nutrition and Technical
Services Division, 3101 Park Center Drive, Alexandria, Virginia 22302.
[49 FR 18457, May 1, 1984; 49 FR 45109, Nov. 15, 1984]
[[Page 257]]
PART 227_NUTRITION EDUCATION AND TRAINING PROGRAM--Table of Contents
Subpart A_General
Sec.
227.1 General purpose and scope.
227.2 Definitions.
227.3 Administration.
227.4 Application and agreement.
227.5 Program funding.
Subpart B_State Agency Provisions
227.30 Responsibilities of State agencies.
227.31 Audits, management reviews, and evaluations.
Subpart C_State Coordinator Provisions
227.35 Responsibilities of State coordinator.
227.36 Requirements of needs assessment.
227.37 State plan for nutrition education and training.
Subpart D_Miscellaneous
227.40 Program information.
227.41 Recovery of funds.
227.42 Grant closeout procedures.
227.43 Participation of adults.
227.44 Management evaluations and reviews.
Appendix to Part 227--Apportionment of Funds for Nutrition Education and
Training
Authority: Sec. 15, Pub. L. 95-166, 91 Stat. 1340 (42 U.S.C. 1788),
unless otherwise noted.
Source: 44 FR 28282, May 15, 1979, unless otherwise noted.
Subpart A_General
Sec. 227.1 General purpose and scope.
The purpose of these regulations is to implement section 19 of the
Child Nutrition Act (added by Pub. L. 95-166, effective November 10,
1977) which authorizes the Secretary to formulate and carry out a
nutrition information and education program through a system of grants
to State agencies to provide for (a) the nutritional training of
educational and foodservice personnel, (b) the foodservice management
training of school foodservice personnel, and (c) the conduct of
nutrition education activities in schools and child care institutions.
To the maximum extent possible, the Program shall fully utilize the
child nutrition programs as a learning experience.
Sec. 227.2 Definitions.
(a) Administrative costs means costs allowable under Federal
Management Circular 74-4, other than program costs, incurred by a State
agency for overall administrative and supervisory purposes, including,
but not limited to, costs of financial management, data processing,
recordkeeping and reporting, personnel management, and supervising the
State Coordinator.
(b) Child Care Food Program means the program authorized by section
17 of the National School Lunch Act, as amended.
(c) Child Nutrition Programs means any or all of the following:
National School Lunch Program, School Breakfast Program, Child Care Food
Program.
(d) Commodity only school means a school which has entered into an
agreement under Sec. 210.15a(b) of this subchapter to receive
commodities donated under part 250 of this chapter for a nonprofit lunch
program.
(e) Department means the U.S. Department of Agriculture.
(f) Federal fiscal year means a period of 12 calendar months
beginning October 1 of any calendar year and ending September 30 of the
following calendar year.
(g) FNS means the Food and Nutrition Service of the Department.
(h) FNSRO means the appropriate Regional Office of the Food and
Nutrition Service of the Department.
(i) Institution means any licensed, nonschool, public or private
nonprofit organization providing day care services where children are
not maintained in permanent residence, including but not limited to day
care centers, settlement houses, after school recreation centers,
neighborhood centers, Head Start centers, and organizations providing
day care services for handicapped children and includes a sponsoring
organization under the Child Care Food Program regulations.
(j) National School Lunch Program means the lunch program authorized
by the National School Lunch Act.
(k) Needs assessment means a systematic process for delineating the
scope, extent (quantity), reach and success of any current nutrition
education activities, including those relating to:
[[Page 258]]
(1) Methods and materials available inside and outside the
classroom; (2) training of teachers in the principles of nutrition and
in nutrition education strategies, methods, and techniques; (3) training
of school foodservice personnel in the principles and practices of
foodservice management; and (4) compilation of existing data concerning
factors impacting on nutrition education and training such as statistics
on child health and competency levels achieved by foodservice personnel.
(l) Program costs means costs, other than administrative costs,
incurred in connection with any or all of the following:
(1) The State Coordinator's salary, and related support personnel
costs, including fringe benefits and travel expenses; (2) applying for
assessment and planning funds; (3) the conduct of the needs assessment;
(4) the development of the State Plan; and (5) the implementation of the
approved State Plan, including related support services.
(m) Program means the Nutrition Education and Training Program
authorized by section 19 of the Child Nutrition Act of 1966, as amended.
(n) School means: (1) An educational unit of high school grade or
under operating under public or nonprofit private ownership in a single
building or complex of buildings. The term ``high school grade or
under'' includes classes of preprimary grade when they are conducted in
a school having classes of primary or higher grade, or when they are
recognized as a part of the educational system in the State, regardless
of whether such preprimary grade classes are conducted in a school
having classes of primary or higher grade.
(2) With the exception of residential summer camps which participate
in the Summer Food Service Program for Children and private foster
homes, any distinct part of a public or nonprofit private institution or
any public or nonprofit private child care institution, which (i)
maintains children in residence, (ii) operates principally for the care
of children and (iii) if private, is licensed to provide residential
child care services under the appropriate licensing code by the State or
a subordinate level of government. The term ``child care institution''
includes, but is not limited to: Homes for the mentally retarded, the
emotionally disturbed, the physically handicapped, and unmarried mothers
and their infants; group homes; halfway houses; orphanages; temporary
shelters for abused children and for runaway children; long term care
facilities of chronically ill children; and juvenile detention centers.
(3) With respect to the Commonwealth of Puerto Rico, non-profit
child care centers certified as such by the Governor of Puerto Rico.
(o) School Breakfast Program means the program authorized by section
4 of the Child Nutrition Act of 1966, as amended.
(p) Foodservice personnel means those individuals responsible for
planning, preparing, serving and otherwise operating foodservice
programs funded by USDA grants as provided for in the National School
Lunch Act and the Child Nutrition Act of 1966.
(q) State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
the Trust Territory of the Pacific Islands, and the Northern Mariana
Islands.
(r) State agency means the State educational agency.
(s) State educational agency means, as the State legislature may
determine:
(1) The Chief State School Officer (such as the State Superintendent
of Public Instruction, Commissioner of Education, or similar officer),
or (2) a board of education controlling the State Department of
Education.
Sec. 227.3 Administration.
(a) Within the Department, FNS shall act on behalf of the Department
in the administration of the Program.
(b) Within the States, responsibility for administration of the
Program shall be in the State agency, except that FNSRO shall administer
the Program with respect to nonprofit private schools or institutions in
any State where the State agency is prohibited by law from administering
the Program in nonprofit private schools or institutions.
[[Page 259]]
Sec. 227.4 Application and agreement.
After the initial fiscal year of participation each State agency
desiring to take part in the Program shall enter into a written
agreement with the Department for the administration of the Program in
accordance with the provisions of this part. The State agency shall
execute Form FNS-74, which shall constitute the written agreement.
(Approved by the Office of Management and Budget under control number
0584-0062)
(44 U.S.C. 3506)
[44 FR 28282, May 15, 1979, as amended at 47 FR 746, Jan. 2, 1982]
Sec. 227.5 Program funding.
(a) Total grant. The total grant to each State agency for each
fiscal year for program costs and administrative costs shall consist of
an amount equal to 50 cents per child enrolled in schools and
institutions within the State during such year, but in no event shall
such grant be less than $50,000: Provided, however, That a State's total
grant shall be reduced proportionately if the State does not administer
the program in nonprofit private schools and institutions. If funds
appropriated for a fiscal year are insufficient to pay the amount to
which each State is entitled, the amount of such grant shall be ratably
reduced to the extent necessary so that the total of the amounts paid to
each State does not exceed the amount of appropriated funds. Each State
agency which receives funds based on all children enrolled in public and
nonprofit private schools and institutions shall make the Program
available to those schools and institutions. Enrollment figures shall be
the latest available as certified by the Department of Education.
(b) First fiscal year participation--(1) Assessment and planning
grant. A portion of the total grant shall be made available to each
State agency during its first fiscal year of participation as an
assessment and planning grant for:
(i) Employing a State Coordinator, as provided for in Sec. 227.30,
and related support personnel costs including fringe benefits and travel
expenses, (ii) undertaking a needs assessment in the State, (iii)
developing a State Plan for nutrition education and training within the
State, and (iv) applying for the State assessment and planning grant.
(2) Advances for the assessment and planning grant. FNS shall make
advances to any State desiring to participate in the Program, to enable
the State to carry out the responsibilities set forth in paragraph
(b)(1) of this section. Advances shall be made in two phases, in
accordance with the following procedures:
(i) Initially, State agencies may receive an advance up to $35,000
for the purpose of hiring a State coordinator, as provided for in Sec.
227.30. Application for such an advance shall be made on Form AD-623
when the State agency applies for participation in the Program. The
information required for this advance shall be set out in Part III,
Budget Information, Section B, Budget Categories. The State agency shall
there indicate the funds required for the salary, travel, and fringe
benefits of the State Coordinator, and related personnel costs necessary
to carry out the duties and responsibilities of the State Coordinator.
(ii) After appointment of the State Coordinator, the State agency
may receive an additional advance of up to 50 percent of the total grant
to which the State agency is entitled for the first year of
participation, after deduction of the advance made for the State
Coordinator under Sec. 227.5(b)(2), but not to exceed $100,000, for the
purpose of undertaking a needs assessment in the State, developing a
State Plan for nutrition education and training, and applying for the
assessment and planning grant. Application for such advance shall be
made by amending Part III, Budget Information, of Form AD-623.
(3) Funds for implementing State plan. (i) States receiving
advances. Each State agency shall receive the remaining portion of its
total grant in order to implement its State plan, which has been
approved by FNS, if the State agency has carried out the
responsibilities for which advances were received. With the submission
of the State plan each State agency may apply for the funds remaining of
its total grant.
(ii) States previously participating. Those States which previously
participated may apply for their total grant upon submission of the
State Plan.
[[Page 260]]
(c) Administrative costs. Each State agency may use up to 15 percent
of its total grant for up to 50 percent of its cash expenditures for
administrative costs.
(d) Payment to State agencies. Approval of the State plan by FNS is
a prerequisite to the payment of funds to the State agency. All funds
made available for the Program shall be provided through a letter of
credit or check, as determined by FNS.
(e) Unobligated funds. The State agency will release to FNS any
Federal funds made available to it under the Program which are
unobligated by September 30 of each fiscal year.
(f) Funds for existing programs. State agencies shall maintain their
present level of funding for existing nutrition education and training
programs. FNS funds for the Program shall augment current nutrition
education and training programs and proj ects. Funds made available by
FNS for this Program shall not replace such funds.
[44 FR 28282, May 15, 1979, as amended at 52 FR 8223, Mar. 17, 1987]
Subpart B_State Agency Provisions
Sec. 227.30 Responsibilities of State agencies.
(a) General. Except to the extent that it would be inconsistent with
this part, the Program shall be administered in accordance with the
applicable provisions of the Departmental regulations 7 CFR part 3015.
(b) Application. For the initial fiscal year of participation States
shall make application for administration of the Program on Form and are
responsible for amending Form AD-623 to request advance funding. In the
initial application, in connection with the request for advance funding
for the State Coordinator, part IV, Program Narrative, of Form AD-623
shall indicate the State agency's procedures for hiring a State
Coordinator and contain a justification for the dollar value of salary
requested. The narrative shall also indicate the time frame for hiring
the State Coordinator. In amending Form AD-623 in connection with the
request for advance funding for the remaining portion of the assessment
and planning grant, part IV, Program Narrative, shall set forth the
details for areas of the assessment and planning grant, other than
employment of the State Coordinator.
(b-1) If any State does not apply for participation in the Program,
by April 1 of a fiscal year by submitting Form AD 623 as required in
Sec. 227.30(b) and Sec. 227.5(b)(2)(i), the State's share of the funds
shall be provided to the remaining States, so long as this does not take
the remaining States' grants above 50 cents per child enrolled in
schools or institutions, except in those States which receive a minimum
grant of $75,000 for a fiscal year.
(c) State Coordinator. After execution of the agreement the State
agency shall appoint a nutrition education specialist to serve as a
State Coordinator for the Program who may be employed on a full-time or
part-time basis. The State Coordinator may be a State employee who
reports directly or indirectly to the Chief State School Officer or an
individual under contract with the State agency to serve as the State
Coordinator. A State agency shall not contract with an organization to
provide for the services of a State Coordinator. The State Coordinator,
at a minimum, shall meet both of the following requirements:
(1) The State Coordinator shall have a Masters degree or equivalent
experience. Equivalent experience is experience related to the position
being filled or as defined by State civil service or personnel policies.
If the Masters degree is not in foods and nutrition or dietetics, the
Bachelors degree shall include academic preparations in foods and
nutrition or dietetics.
(2) In addition, the State Coordinator shall have recognized and
demonstrated skills in management and education through at least three
years experience in one or more of these areas: Elementary or secondary
education, but not limited to classroom teaching; foodservice management
and training for adults; community nutrition or public health programs;
foodservice operations for children; or community action or assistance
programs.
[[Page 261]]
(d) Needs assessment. Each State agency shall conduct an ongoing
needs assessment in accordance with Sec. 227.36 The needs assessment
shall be the data base utilized in formulating the State plan for each
fiscal year. For the first year of participation a State agency may
apply for funds in order to carry out the needs assessment in accordance
with Sec. 227.5.
(e) Developing and submitting the State plan. Each State agency
shall submit to the Secretary a State plan for Nutrition Education and
Training in accordance with Sec. 227.37 prior to the beginning of each
fiscal year. The date of submission for the State plan shall be
designated by the Secretary. The Secretary shall act on the submitted
State plan within 60 days after it is received. For the first year of
participation the State agency shall submit to the Secretary, within
nine months after the award of the planning and assessment grant, a
State plan for nutrition education and training in accordance with Sec.
227.37.
(f) Records and reports. (1) Each State agency shall maintain full
and complete records concerning Program operations and shall retain such
records in accordance with OMB Circular A-102 Attachment C.
(2) Each State agency shall submit to FNS a quarterly Financial
Status Report, Form SF-269, as required by OMB Circular A-102,
Attachment H.
(3) Each State agency shall submit an annual performance report
(Form FNS-42) to FNS within 30 days after the close of the Fiscal Year.
(4) Each State agency shall maintain a financial management system
in accordance with Federal Management Circular 74-4 and OMB Circular A-
102, Attachment G.
(5) Each State agency shall comply with the requirements of OMB
Circular A-102, Attachments N and O, and Federal Management Circular 74-
4, for property management and the procurement of supplies, equipment
and other services with these Program funds.
(6) Any income accruing to a State or local agency because of the
Program shall be used in accordance with OMB Circular A-102, Attachment
E.
(g) Nondiscrimination. Each State agency shall ensure that Program
operations are in compliance with the Department's nondiscrimination
regulations (part 15 of this title) issued under title VI of the Civil
Rights Act of 1964.
(Approved by the Office of Management and Budget under control number
0584-0062)
(44 U.S.C. 3506; E.O. 12372, July 14, 1982, 47 FR 30959, sec. 401(b) of
the Intergovernmental Cooperation Act of 1968 (31 U.S.C. 6506(c))
[44 FR 28282, May 15, 1979, as amended at 45 FR 14842, Mar. 7, 1980; 47
FR 746, Jan. 7, 1982; 47 FR 22072, May 21, 1982; 48 FR 29123, June 24,
1983; 48 FR 39213, Aug. 30, 1983]
Sec. 227.31 Audits, management reviews, and evaluations.
(a) Audits. (1) Examinations by the State agencies in the form of
audits or internal audits shall be performed in accord with OMB Circular
A-102, Attachment G.
(b) Management reviews. The State agency is responsible for meeting
the following requirements:
(1) The State agency shall establish management evaluation and
review procedures to monitor compliance with the State plan for local
educational agencies and land grant colleges, other institutions of
higher education and public or private nonprofit educational or research
agencies, institutions, or organizations.
(2) The State agency shall require participating agencies to
establish program review procedures to be used in reviewing the Agencies
operations and those of subsidiaries or contractors.
(c) Evaluations. The State agency shall conduct formal evaluations
of program activities at least annually. These evaluations shall be
aimed at assessing the effectiveness of the various activities
undertaken by the State and local agencies. State officials shall
analyze why some activities have proved effective while others have not
and shall initiate appropriate improvements. The results of the
evaluations shall be used to make adjustments in ongoing activities and
to plan activities and programs for the next year's State plan. The
State agency shall submit a plan for evaluation of Program
[[Page 262]]
activities as part of the State plan in accordance with Sec.
227.37(b)(14).
(Approved by the Office of Management and Budget under control number
0584-0062)
(44 U.S.C. 3506; E.O. 12372 (July 14, 1982, 47 FR 30959); sec. 401(b)
Intergovernmental Cooperation Act of 1968 (31 U.S.C. 6506(c))
[44 FR 28282, May 15, 1979, as amended at 47 FR 746, Jan. 7, 1982; 48 FR
29123, June 24, 1983]
Subpart C_State Coordinator Provisions
Sec. 227.35 Responsibilities of State coordinator.
At a minimum, the State Coordinator shall be responsible for: (a)
Preparation of a budget, (b) the conduct of the needs assessment, (c)
development of a State plan, (d) implementation of the approved State
Plan, (e) evaluation of the progress and implementation of the State
Plan, (f) coordination of the Program with the Child Nutrition Programs
at the State and local levels, (g) coordination of the Program with
other nutrition education and training programs conducted with Federal
or State funds, (h) communication of needs and accomplishments of State
nutrition education and training programs to parents and the communty at
large, (i) use of Program funds in compliance with all regulations,
instructions, or other guidance material provided by FNS, (j)
coordinating the submission and preparation of the Program financial
status report (SF-269), and (k) annual evaluation of the effectiveness
of the State Plan.
Sec. 227.36 Requirements of needs assessment.
(a) The needs assessment is an ongoing process which identifies the
discrepancies between ``what should be'' and ``what is'' and shall be
applied to each category listed below to enable State agencies to
determine their nutrition education and training needs for each year.
The needs assessment shall identify the following as a minimum:
(1) Children, teachers, and food service personnel in need of
nutrition education and training; (2) existing State or federally funded
nutrition education and training programs including their: (i) Goals and
objectives; (ii) source and level of funding; (iii) any available
documentation of their relative success or failure; and (iv) factors
contributing to their success or failure; (3) offices or agencies at the
State and local level designated to be responsible for nutrition
education and training of teachers and school food service personnel;
(4) any relevant State nutrition education mandates; (5) funding levels
at the State and local level for preservice and inservice nutrition
education and training of food service personnel and teachers; (6) State
and local individuals, and groups conducting nutrition education and
training; (7) materials which are currently available for nutrition
education and training programs, and determine for each: (i) Subject
area and content covered; (ii) grade level; (iii) how utilized; (iv)
acceptability by user; (v) currency of materials; (8) any major child
nutrition related health problems in each State; (9) existing sources of
primary and secondary data, including any data that has been collected
for documenting the State's nutrition education and training needs; (10)
available documentation of the competencies of teachers in the area of
nutrition education; (11) available documentation of the competencies of
food service personnel; (12) problems encountered by schools and
institutions in procuring nutritious food economically and in preparing
nutritious appetizing meals and areas where training can assist in
alleviating these problems; (13) problems teachers encounter in
conducting effective nutrition education activities and areas where
inservice training or materials can assist in alleviating these
problems; (14) problems in dietary habits of children and areas where
nutrition education may assist in positive changes; (15) problems
encountered in coordinating the nutrition education by teachers with the
meal preparation and activities of the food service facility and areas
where training might alleviate these problems.
(b) The needs assessment should be an ongoing process and provide
not only data on current activities but also a description of the
problems and needs in each category and whether training
[[Page 263]]
or materials would help alleviate the identified problems.
Sec. 227.37 State plan for nutrition education and training.
(a) General. Each fiscal year the State agency shall submit a State
plan for Nutrition Education and Training for approval to FNS. The State
plan shall be based on the needs identified from the ongoing needs
assessment and evaluation of the State plans from previous years. The
State plan shall be submitted in accordance with Sec. 227.30(e).
Guidance for the preparation and submission of the State plan shall be
provided by FNS.
(b) Requirements for the State plan. The State plan shall provide
the following:
(1) Description of the ongoing needs assessment conducted within the
State;
(2) The findings of the needs assessment within the State used to
determine the goals and objectives of the State plan and results of the
evaluation of the previous years' State plans for:
(i) Inservice training of food service personnel, (ii) nutrition
education of children, (iii) inservice training in nutrition education
for teachers;
(3) Goals and objectives of the State plan;
(4) Identification of the priority populations to be reached during
the fiscal year;
(5) Provisions for coordinating the nutrition education and training
programs carried out with funds made available under this part with any
related publicly supported programs being carried out within the State
to include:
(i) Identification of existing programs that may be utilized, (ii)
description of how representatives of such groups are to be involved in
the planning and implementation of the State program; (iii) criteria and
procedure for selection of such representatives;
(6) Plans to solicit advice and recommendations of the National
Advisory Council on Child Nutrition, State educational or other
appropriate agencies; the U.S. Department of Education; the U.S.
Department of Health and Human Services; and other interested groups and
individuals concerned with improvement of child nutrition.
(7) Plans, including a timetable, for reaching all children in the
State with instruction in the nutritional value of foods and the
relationship among food, nutrition and health, for inservice training of
food service personnel in the principles and skills of food service
management and nutrition and for inservice instruction for teachers in
sound principles of nutrition education;
(8) Any plans for using, on a priority basis, the resources of the
land-grant colleges eligible to receive funds under the Act of July 2,
1862 (12 Stat. 503; 7 U.S.C. 301 through 305, 307, and 308) or the Act
of August 30, 1890 (26 Stat. 417, as amended; 7 U.S.C. 312 through 326
and 328), including the Tuskegee Institute;
(9) A brief description of the program or activities to be
contracted with land-grant colleges, described above, and other
institutions of higher education, and other public or private nonprofit
educational or research agencies, institutions or organizations for
carrying out nutrition education and training activities;
(10) A brief description of pilot projects, including objectives,
subject matter and expected outcomes, to be contracted with the land-
grant colleges described above, other institutions of higher education,
public and nonprofit educational or research agencies, institutions, or
organizations for but not limited to proj ects for development,
demonstration, testing and evaluation of curricula for use in early
childhood, elementary, and secondary education programs;
(11) Identification of schools, school districts, and sponsoring
agencies which may agree to participate in the nutrition education and
training program;
(12) A brief description of (i) State agency sponsored pilot
projects including objectives, subject matter and anticipated outcomes
and (ii) nutrition education and training programs to be conducted by
schools, school districts, and sponsoring agencies receiving funds under
this provision including
[[Page 264]]
objectives, subject matter and expected outcomes;
(13) Time frame and milestones for implementation of State plans;
(14) Plans to evaluate program activities including an evaluation
component for each objective of the State plan;
(15) Description of staff available to perform State agency
responsibilities of the State nutrition education and training program
which includes:
(i) Definition of duties and responsibilities, (ii) minimum
professional qualifications, (iii) number and classification of
personnel;
(16) A description of the procedures used to comply with the
requirements of Title VI of the Civil Rights Act of 1964, including
racial and ethnic participation data collection, public notification
procedures and the annual civil rights compliance review process;
(17) Plans for the conduct of audits in accordance with Sec.
227.31;
(18) A budget detailing the use of program funds;
(19) Description of the financial management system in accordance
with Sec. 227.30(e);
(20) Description of the management evaluation and review procedures
established in accordance with Sec. 227.31(b); and
(21) Other components that the States determine necessary.
(c) States eligible to receive additional funds pursuant to Sec.
227.30(b-1) shall submit an amendment to the State plan to the Food and
Nutrition Service Regional Office for prior approval.
[44 FR 28282, May 15, 1979, as amended at 45 FR 14842, Mar. 7, 1980; 48
FR 39213, Aug. 30, 1983]
Subpart D_Miscellaneous
Sec. 227.40 Program information.
Persons desiring information concerning the program may write to the
appropriate State agency or Regional Office of FNS as indicated below:
(a) In the States of Connecticut, Maine, Massachusetts, New
Hampshire, Rhode Island, and Vermont: New England Regional Office, FNS,
U.S. Department of Agriculture, 33 North Avenue, Burlington, Mass.
01803.
(b) In the States of Delaware, District of Columbia, Maryland, New
Jersey, New York, Pennsylvania, Puerto Rico, Virginia, Virgin Islands,
and West Virginia: Mid-Atlantic Regional Office, FNS, U.S. Department of
Agriculture, One Vahlsing Center, Robbinsville, N.J. 08691.
(c) In the States of Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina, and Tennessee: Southeast
Regional Office, FNS, U.S. Department of Agriculture, 1100 Spring Street
NW., Atlanta, Ga. 30309.
(d) In the States of Illinois, Indiana, Michigan, Minnesota, Ohio,
and Wisconsin: Midwest Regional Office, FNS, U.S. Department of
Agriculture, 536 South Clark Street, Chicago, Ill. 60605.
(e) In the States of Colorado, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah, and Wyoming: Mountain Plains
Regional Office, FNS, U.S. Department of Agriculture, 2420 West 26th
Avenue, Room 430D, Denver, Colo. 80211.
(f) In the States of Arkansas, Louisiana, New Mexico, Oklahoma, and
Texas: Southwest Regional Office, FNS, U.S. Department of Agriculture,
1100 Commerce Street, Room 5-C-30, Dallas, Tex. 75242.
(g) In the States of Alaska, American Samoa, Arizona, California,
Guam, Hawaii, Idaho, Nevada, Oregon, Trust Territory of the Pacific
Islands, the Northern Mariana Islands, and Washington: Western Regional
Office, FNS, U.S. Department of Agriculture, 550 Kearny Street, Room
400, San Francisco, Calif. 94108.
Sec. 227.41 Recovery of funds.
(a) FNS may recover funds from a State agency under any of the
following conditions:
(1) If FNS determines, through a review of the State agency's
reports, program, or financial analysis, monitoring, audit or otherwise,
that the State agency's performance is inadequate or that the State
agency has failed to comply with this part or FNS instructions and
guidelines.
(2) If FNS determines that the State agency is not expending funds
at a rate commensurate with the amount of
[[Page 265]]
funds distributed or provided for expenditure under the program.
(3) If FNS determines that a State agency is not providing full and
timely reports.
(b) FNS shall effect such recoveries of funds through adjustments in
the amount of funds provided under the program.
Sec. 227.42 Grant closeout procedures.
The requirements of OMB Circular A-102, Attachment L, are applicable
in the termination of any grant under this part.
Sec. 227.43 Participation of adults.
Nothing in this part shall prohibit a State or local educational
agency from making available or distributing to adults education
materials, resources, activities or programs authorized by this part.
Sec. 227.44 Management evaluations and reviews.
FNS shall establish evaluation procedures to determine whether State
agencies carry out the purpose and provisions of this part, the State
agency plan and FNS guidelines and instructions. To the maximum extent
possible the State's performance shall be reviewed and evaluated by FNS
on a regular basis including the use of public hearings.
Appendix to Part 227--Apportionment of Funds for Nutrition Education and
Training
Pursuant to sections 19(j) of the Child Nutrition Act of 1966, as
amended (42 U.S.C. 1788), funds available for the fiscal year ending
September 30, 1980, are apportioned among the States as follows:
[See footnotes at the end of Table.]
----------------------------------------------------------------------------------------------------------------
Residential Nonresidential
Public Private child care child care
State schools schools institutions institutions Total \5\
\1\ \2\ \3\ \4\
----------------------------------------------------------------------------------------------------------------
Connecticut.................................... 231,069 38,488 1,260 2,866 273,683
Maine.......................................... 93,406 6,538 387 808 101,139
Massachusetts.................................. 420,866 68,337 2,697 5,352 497,252
New Hampshire.................................. 67,087 7,978 331 1,160 76,556
Rhode Island................................... 62,521 12,570 304 767 76,162
Vermont........................................ 39,419 3,814 247 579 75,000
914,368 137,725 5,226 11,532 1,099,792
Delaware....................................... 43,210 7,277 107 1,339 75,000
District of Columbia........................... 44,309 7,511 447 2,458 75,000
Maryland....................................... 315,196 51,992 1,292 5,234 373,714
New Jersey..................................... 520,438 117,060 3,930 8,588 650,016
New York....................................... 1,204,026 274,593 14,068 19,756 1,512,443
Pennsylvania................................... 796,518 182,089 9,026 7,312 994,945
Puerto Rico.................................... 280,750 36,776 0 0 317,526
Virginia....................................... 410,660 34,947 6,239 6,068 457,914
Virgin Islands................................. 9,783 2,452 11 0 75,000
West Virginia.................................. 154,000 4,942 770 854 160,566
3,778,890 719,639 35,890 51,609 4,692,124
Alabama........................................ 296,412 21,949 892 10,607 329,860
Florida........................................ 589,122 57,440 2,116 19,074 667,752
Georgia \5\.................................... 424,042 27,708 2,783 14,806 469,339
Kentucky....................................... 269,690 27,786 3,685 3,652 304,813
Mississippi.................................... 192,134 25,802 541 12,175 230,652
North Carolina................................. 452,523 22,104 3,052 19,722 497,401
South Carolina \5\............................. 243,200 19,225 1,255 6,559 270,239
Tennessee...................................... 339,753 17,396 1,448 7,847 366,444
2,806,876 219,410 15,772 94,442 3,136,500
Illinois....................................... 793,671 160,491 5,343 15,971 975,476
Indiana........................................ 433,267 39,967 2,814 5,279 481,327
Michigan....................................... 747,374 85,655 3,069 7,817 843,915
Minnesota...................................... 314,333 38,994 1,245 3,135 357,707
Ohio........................................... 818,192 110,561 5,836 10,767 945,356
Wisconsin...................................... 344,962 73,707 1,922 3,579 424,170
3,451,799 509,375 20,229 46,548 4,027,951
Arkansas....................................... 177,730 8,095 385 4,453 190,663
Louisiana...................................... 317,817 64,562 1,551 6,307 390,237
New Mexico..................................... 108,673 5,448 235 2,619 116,975
Oklahoma....................................... 229,166 3,969 1,916 8,639 243,690
Texas.......................................... 1,115,829 52,654 4,163 38,934 1,211,580
[[Page 266]]
1,949,215 134,728 8,250 60,952 2,153,145
Colorado \5\................................... 217,264 15,800 937 4,399 238,400
Iowa........................................... 221,255 25,957 3,204 2,631 253,047
Kansas......................................... 168,720 12,765 330 1,062 182,877
Missouri....................................... 350,248 54,950 1,271 6,629 413,098
Montana........................................ 63,950 3,425 75 677 75,000
Nebraska....................................... 115,891 17,629 376 1,694 135,590
North Dakota \5\............................... 47,486 4,826 309 383 75,000
South Dakota................................... 53,792 5,760 267 390 75,000
Utah........................................... 126,488 1,518 541 1,325 129,872
Wyoming........................................ 36,709 1,206 74 497 75,000
1,401,803 143,836 7,384 19,687 1,652,884
Alaska......................................... 35,308 739 310 392 75,000
Samoa.......................................... 3,616 778 0 0 75,000
Arizona........................................ 198,407 21,871 661 4,712 225,651
California..................................... 1,629,801 170,376 28,777 44,277 1,873,231
Guam........................................... 11,118 1,985 0 0 75,000
Hawaii......................................... 66,454 13,348 1,854 3,352 85,008
Idaho.......................................... 79,009 1,868 119 860 81,856
Nevada......................................... 56,927 2,179 473 1,643 75,000
Oregon......................................... 183,441 9,379 859 3,703 197,382
Trust Territory................................ 11,590 0 0 0 75,000
Washington..................................... 299,362 17,318 2,140 5,656 324,476
N Marianas..................................... 1,945 0 0 0 75,000
2,576,978 239,841 35,193 64,595 3,237,604
16,879,929 2,104,554 127,944 349,365 20,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Sources: (1) U.S. Department of Health, Education, and Welfare, Education Division, NCES, Statistics of
Public Schools, Fall 1977, prepublication data, Table 5 for States and areas, except (2) Northern Marianas and
Trust Territory, 1975-76 data from Department of Interior, adjust to include pre-school; Puerto Rico and Guam,
Fall 1976 data.
\2\ U.S. Department of Health, Education, and Welfare, Education Division, (NCES). Digest of Education
Statistics, 1976, Table 46, p. 47, Northern Marianas and Trust Territory 1975-76 data from Department of
Interior, adjust to include pre-school.
\3\ U.S. Department of Agriculture, Food and Nutrition Service, Annual Report of Meal Service in Schools (Form
FNS-47), October 1978.
\4\ U.S. Department of Health, Education, and Welfare, Day Care Centers In the U.S.; A National Profile 1976-77,
Volume 3 of the Final Report of the National Day Care Study, Table 63.
\5\ A portion of these funds will be withheld from the States' allocations for use by FNS in administering the
Program in nonprofit private schools or institutions.
[44 FR 70451, Dec. 7, 1979]
PART 235_STATE ADMINISTRATIVE EXPENSE FUNDS--Table of Contents
Sec.
235.1 General purpose and scope.
235.2 Definitions.
235.3 Administration.
235.4 Allocation of funds to States.
235.5 Payments to States.
235.6 Use of funds.
235.7 Records and reports.
235.8 Management evaluations and audits.
235.9 Procurement and property management standards.
235.10 [Reserved]
235.11 Other provisions.
235.12 Information collection/recordkeeping--OMB assigned control
numbers.
Authority: Secs. 7 and 10 of the Child Nutrition Act of 1966, 80
Stat. 888, 889, as amended (42 U.S.C. 1776, 1779).
Source: 41 FR 32405, Aug. 3, 1976, unless otherwise noted.
Sec. 235.1 General purpose and scope.
This part announces the policies and prescribes the regulations
necessary to carry out the provisions of section 7 of the Child
Nutrition Act of 1966, as amended. It prescribes the methods for making
payments of funds to State agencies for use for administrative expenses
incurred in supervising and giving technical assistance in connection
with activities undertaken by them under the National School Lunch
Program (7 CFR part 210), the Special Milk Program (7 CFR part 215), the
School Breakfast Program (7 CFR part 220), the Child and Adult Care Food
Program (7 CFR part 226) and the Food Distribution Program (7 CFR part
250).
(Sec. 7, Pub. L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776))
[44 FR 51185, Aug. 31, 1979, as amended by Amdt. 17, 55 FR 1378, Jan.
16, 1990; 60 FR 15461, Mar. 24, 1995]
[[Page 267]]
Sec. 235.2 Definitions.
For the purpose of this part, the term:
(a) Act means the Child Nutrition Act of 1966, as amended.
(b) CND means the Child Nutrition Division of the Food and Nutrition
Service of the U.S. Department of Agriculture.
(c) Department means the U.S. Department of Agriculture.
(d) Distributing agency means a State agency which enters into an
agreement with the Department for the distribution of donated foods
pursuant to part 250 of this title.
(e) [Reserved]
(f) FNS means the Food and Nutrition Service of the U.S. Department
of Agriculture.
(g) FNSRO means the appropriate Food and Nutrition Service Regional
Office of the Food and Nutrition Service of the U.S. Department of
Agriculture.
(h) Fiscal year means a period of 12 calendar months beginning
October 1, 1976, and October 1 of each calendar year thereafter and
ending with September 30 of the following calendar year.
(i) Institution means a child or adult care center or a sponsoring
organization as defined in part 226 of this chapter.
(j)-(k) [Reserved]
(l) OIG means the Office of the Inspector General of the Department.
(m) [Reserved]
(n) SAE means federally provided State administrative expense funds
for State agencies under this part.
(o) School means the term as defined in sections 210.2, 215.2(v),
220.2(u), and 226.2 of this chapter, as applicable.
(p) School Food Authority means the governing body which is
responsible for the administration of one or more schools and which has
the legal authority to operate a breakfast or a lunch program therein.
The term ``School Food Authority'' also includes a nonprofit agency or
organization to which such governing body has delegated authority to
operate the lunch or breakfast program in schools under its
jurisdiction, provided the governing body retains the responsibility to
comply with breakfast or lunch program regulations.
(q) Secretary means the Secretary of Agriculture.
(q-1) 7 CFR part 3015 means the Uniform Federal Assistance
Regulations published by the Department to implement OMB Circulars A-21,
A-87, A-102, A-110, and A-122; and Executive Order 12372. (For
availability of OMB Circulars referenced in this definition, see 5 CFR
1310.3.)
(q-2) 7 CFR part 3017 means the Department's regulation to implement
Executive Order 12549, covering governmentwide rules on suspension and
debarment as well as The Drug Free Workplace Act of 1988.
(q-3) 7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
(q-4) 7 CFR part 3052 means the Department's regulations
implementing OMB Circular A-133, ``Audits of State, Local Governments,
and Non-Profit Organizations.'' (For availability of OMB Circulars
referenced in this definition, see 5 CFR 1310.3.)
(r) State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
(s) State agency means (1) the State educational agency or (2) such
other agency of the State as has been designated by the Governor or
other appropriate executive or legislative authority of the State and
approved by the Department to administer programs under part 210, 215,
220, 226 or 250 of this title. Unless otherwise indicated, ``State
agency'' shall also mean ``distributing agency'', as defined in Sec.
235.2(d), when such agency is receiving funds directly from FNS under
this part.
(t) State educational agency means, as the State legislature may
determine: (1) The chief State school officer (such as the State
Superintendent of Public Instruction, Commissioner of Education, or
similar officer), or (2) a
[[Page 268]]
board of education controlling the State department of education.
(Sec. 7, Pub. L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776); sec. 205, Pub.
L. 96-499, The Omnibus Reconciliation Act of 1980, 94 Stat. 2599; secs.
807 and 808, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1772, 1784,
1760); Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80
Stat. 885-890 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C.
1759)
[41 FR 32405, Aug. 3, 1976, as amended at 44 FR 48957, Aug. 21, 1979; 44
FR 51185, Aug. 31, 1979; Amdt. 9, 48 FR 19355, Apr. 29, 1983; Amdt. 14,
51 FR 27151, July 30, 1986; 54 FR 2991, Jan. 23, 1989; Amdt. 17, 55 FR
1378, Jan. 16, 1990; 60 FR 15461, Mar. 24, 1995; 64 FR 50743, Sept. 20,
1999]
Sec. 235.3 Administration.
(a) Within the Department, FNS shall act on behalf of the Department
in the administration of the program for payment to States of State
administrative expense funds covered by this part. Within FNS, CND shall
be responsible for administration of the program.
(b) Each State agency desiring to receive payments under this part
shall enter into a written agreement with the Department. Each agreement
shall cover the operation of the Program during the period specified
therein and may be extended at the option of the Department.
(Sec. 14, Pub. L. 95-166, 91 Stat. 1338 (42 U.S.C. 1776); sec. 7, Pub.
L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776))
[41 FR 32405, Aug. 3, 1976, as amended at 44 FR 48957, Aug. 21, 1979;
Amdt. 14, 51 FR 27151, July 30, 1986]
Sec. 235.4 Allocation of funds to States.
(a) Nondiscretionary SAE Funds. For each fiscal year, FNS shall
allocate the following:
(1) To each State which administers the National School Lunch,
School Breakfast or Special Milk Programs an amount equal to one (1)
percent of the funds expended by such State during the second preceding
fiscal year under sections 4 and 11 of the National School Lunch Act, as
amended, and sections 3, 4 and 17A of the Child Nutrition Act of 1966,
as amended. However, the total amount allocated to any State under this
paragraph shall not be less than $100,000 or the amount allocated to the
State in the fiscal year ending September 30, 1981, whichever is
greater.
(2) To each State which administers the Child and Adult Care Food
Program an amount equal to the sum of: Twenty percent of the first
$50,000; ten percent of the next $100,000; five percent of the next
$250,000; and two and one-half percent of any remaining funds expended
within the State under section 17 of the National School Lunch Act, as
amended, during the second preceding fiscal year. FNS may adjust the
amount of any such allocation in accordance with changes in the size of
the Child and Adult Care Food Program in a State.
(b) Discretionary SAE Funds. For each fiscal year, FNS shall provide
the following additional allocations:
(1) Allocate $30,000 to each State which administers the Child and
Adult Care Food Program (7 CFR part 226).
(2) $30,000 to each State which administers the Food Distribution
Program (part 250 of this chapter) in schools and/or institutions which
participate in programs under parts 210, 220, 226 of this chapter.
(3) Amounts derived by application of the following four-part
formula to each State agency which is allocated funds under paragraph
(a) of this section:
(i) One equal share of forty (40) percent of the funds designated by
FNS for the reviews conducted under Sec. 210.18 of this title.
(ii) The ratio of the number of School Food Authorities
participating in the National School Lunch or Commodity School Programs
under the jurisdiction of the State agency to such School Food
Authorities in all States times twenty (20) percent of the funds
designated by FNS for reviews conducted under Sec. 210.18 or of this
title.
(iii) The ratio of the number of free and reduced price meals served
in School Food Authorities under the jurisdiction of the State agency
during the second preceding fiscal year to the number of free and
reduced price meals served in all States in the second preceding fiscal
year times twenty (20) percent of the funds designated by FNS for
reviews conducted under Sec. 210.18 of this title.
(iv) Equal shares of twenty (20) percent of the funds designated by
FNS for
[[Page 269]]
reviews conducted under Sec. 210.18 of this title for each School Food
Authority under the jurisdiction of the State agency participating in
the National School Lunch or Commodity School Programs which has an
enrollment of 40,000 or more; Provided, however, That for State agencies
with fewer than two School Food Authorities with enrollments of 40,000
or more, an equal share shall be provided to the State agency, for
either, or both, of the two largest School Food Authorities which have
enrollments of more than 2,000; and Provided, further, That State
agencies with only one School Food Authority, regardless of size, shall
be provided with one equal share. For each fiscal year, the amount of
State Administrative Expense Funds designated by FNS for reviews
conducted under Sec. 210.18 of this title and subject to allocation
under this paragraph shall be equal to or greater than the amount
designated by FNS for program management improvements for the fiscal
year ending September 30, 1980.
(4) Funds which remain after the allocations required in paragraphs
(a)(1), (a)(2), (b)(1), (b)(2) and (b)(3) of this section, and after any
payments provided for under paragraph (c) of this section, as determined
by the Secretary, to those States which administer the Food Distribution
Program (part 250 of this chapter) in schools and/or institutions which
participate in programs under parts 210, 220, or 226 of this chapter and
to those States which administer part 226 of this chapter. The amount of
funds to be allocated to each State for the Food Distribution Program
for any fiscal year shall bear the same ratio to the total amount of
funds made available for allocation to the State for the Food
Distribution Program under this paragraph as the value of USDA donated
foods delivered to the State for schools and institutions participating
in programs under parts 210, 220 and 226 of this chapter during the
second preceding fiscal year bears to the value of USDA donated foods
delivered to all the States for such schools and institutions during the
second preceding fiscal year. The amount of funds to be allocated to
each State which administers the Child and Adult Care Food Program for
any fiscal year shall bear the same ratio to the total amount of funds
made available for allocation to all such States under this paragraph as
the amount of funds allocated to each State under paragraph (a)(2) of
this section bears to the amount allocated to all States under that
paragraph.
(c) SAE Funds for the Child and Adult Care Food Program. If a State
elects to have a separate State agency administer the adult care
component of the Child and Adult Care Food Program, such separate State
agency shall receive a pro rata share of the SAE funds allocated to the
State under paragraphs (a)(2), (b)(1), and (b)(4) of this section which
is equal to the ratio of funds expended by the State for the adult care
component of the Child and Adult Care Food Program during the second
preceding fiscal year to the funds expended by the State for the entire
Child and Adult Care Food Program during the second preceding fiscal
year. The remaining funds shall be allocated to the State agency
administering the child care component of the Child and Adult Care Food
Program.
(d) SAE Start-up Cost Assistance for State Administration of Former
ROAPs. For any State agency which agrees to assume responsibility for
the administration of food service programs in nonprofit private schools
or child and adult care institutions that were previously administered
by FNS, an appropriate adjustment in the administrative funds paid under
this part to the State shall be made by FNS not later than the
succeeding fiscal year. Such an adjustment shall consist of an amount of
start-up cost assistance, negotiated with the State agency, of no less
than $10,000 and not exceeding $100,000, per State.
(e) SAE Funding Reduction Upon State Agency Termination of a Food
Service Program. For any State agency which terminates its
administration of any food service program for which State
administrative expense funds are provided under this part, a reduction
in the amount of such funds, negotiated with the State agency, shall be
made by FNS.
(f) SAE Funds for ROAPs. FNS shall have available to it the
applicable
[[Page 270]]
amounts provided for in paragraphs (a)(1), (a)(2), and (b)(1) of this
section, and part 225 of this title, when it is responsible for the
administration of a program or programs within a State.
(g) Reallocation. Funds allotted to State agencies under this
section shall be subject to the reallocation provisions of Sec.
235.5(d).
(h) Withholding SAE funds. The Secretary may withhold some or all of
the funds allocated to the State agency under this section if the
Secretary determines that the State agency is seriously deficient in the
administration of any program for which State administrative expense
funds are provided under this part or in the compliance of any
regulation issued pursuant to those programs. On a subsequent
determination by the Secretary that State agency administration of the
programs or compliance with regulations is no longer seriously deficient
and is operated in an acceptable manner, the Secretary may allocate some
or all of the funds withheld.
(Sec. 14, Pub. L. 95-166, 91 Stat. 1338 (42 U.S.C. 1776); sec. 7, Pub.
L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776); sec. 7(a), Pub. L. 95-627, 92
Stat. 3622 (42 U.S.C. 1751); Pub. L. 96-499, secs. 201 and 204, 94 Stat.
2599; secs. 805, 812, 814 and 819, Pub. L. 97-35, 95 Stat. 521-535 (42
U.S.C. 1754, 1759a, 1774 and 1776); E.O. 12372 (July 14, 1982, 47 FR
30959); sec. 401(b) Intergovernmental Cooperation Act of 1968 (31 U.S.C.
6506(c))
[44 FR 48957, Aug. 21, 1979, as amended at 44 FR 51185, Aug. 31, 1979;
44 FR 53489, Sept. 14, 1979; 45 FR 3566, Jan. 18, 1980; Amdt. 11, 48 FR
27892, June 17, 1983; Amdt. 14, 51 FR 27151, July 30, 1986; Amdt. 15, 51
FR 33862, Sept. 24, 1986; Amdt. 17, 55 FR 1378, Jan. 16, 1990; 56 FR
32949, July 17, 1991; 58 FR 42489, Aug. 10, 1993; 60 FR 15462, Mar. 24,
1995; 64 FR 50743, Sept. 20, 1999]
Sec. 235.5 Payments to States.
(a) Method of payment. FNS will specify the terms and conditions of
the State agency's annual grant of SAE funds in conjunction with the
grant award document and will make funds available for payment by means
of a Letter of Credit issued in favor of the State agency. The total
amount of a State agency's grant shall be equal to the sum of the
amounts allocated to such agency under Sec. 235.4 plus or minus any
adjustments resulting from the reallocation provisions under paragraph
(d) of this section plus any transfers under Sec. 235.6(a) and/or Sec.
235.6(c) of this part. The amount of SAE funds made available for
payment to a State agency in any fiscal year shall be determined by FNS
upon approval of the State agency's administrative plan under paragraph
(b) of this section and any amendments to such plan under paragraph (c)
of this section. Funds shall not be made available before the State
agency's plan or amendment to such plan, as applicable, has been
approved by FNS. However, if the plan has not been approved by October 1
of the base year, FNS may advance SAE funds to the State agency, in
amounts determined appropriate by FNS, pending approval of the plan.
(b) Administrative plan. (1) Each State agency shall submit, subject
to FNS approval, an initial State Administrative Expense plan based upon
guidance provided by FNS. This base year plan shall include:
(i) The staffing pattern for State level personnel;
(ii) A budget for the forthcoming fiscal year showing projected
amounts (combined SAE and State funds) by cost category;
(iii) The total amount of budgeted funds to be provided from State
sources;
(iv) The total amount of budgeted funds to be provided under this
part;
(v) The State agency's estimate of the total amount of budgeted
funds (combined SAE and State funds) attributable to administration of
the School Nutrition Programs (National School Lunch, School Breakfast
and Special Milk Programs), Child and Adult Care Food Program, and/or
Food Distribution Program in schools and child and adult care
institutions and to each of the major activity areas of the State
agency; and
(vi) The State agency's estimate of the total Child and Adult Care
Food Program audit funds to be used for the forthcoming fiscal year.
(2) These activity areas shall be defined and described by the State
agency in accordance with guidance issued by FNS and may include such
activities as program monitoring, technical assistance, Federal
reporting/claims
[[Page 271]]
processing, policy implementation, and allocation of foods to recipient
agencies.
(3) Except in specific instances where determined necessary by FNS,
State agencies shall not be required to maintain expenditure records by
activity area or program. State agencies shall refer to Office of
Management and Budget Circular A-87, Attachment B, to establish cost
categories.
(4) FNS shall approve a State agency's plan, or any amendment to
such plan under paragraph (c) of this section, if it determines that the
plan or amendment is consistent with program administrative needs and
SAE requirements under this part.
(5) To the extent practicable, State agencies shall implement their
approved plans (as amended). FNS shall monitor State agency
implementation of the plans through management evaluations, State agency
reports submitted under this part, audits, and through other available
means.
(6) FNS may expand plan requirements for individual State agencies
in order to address specific administrative deficiencies which affect
compliance with program requirements and which have been identified by
FNS through its monitoring activities.
(c) Amendments to the administrative plan. A State agency may amend
its plan at any time to reflect changes in funding or activities, except
that, if such changes are substantive as defined in the June 5, 1997
guidance, and any amendments or updates to this guidance, the State
agency shall amend its plan in accordance with guidance provided by FNS.
Plan amendments shall provide information in a format consistent with
that provided in the State agency's plan, but shall only require FNS
approval if it results in a substantive change as defined by FNS.
(d) Reallocation of funds. Annually, between March 1 and May 1 on a
date specified by FNS, of each year, each State agency shall submit to
FNS a State Administrative Expense Funds Reallocation Report (FNS-525)
on the use of SAE funds. At such time, a State agency may release to FNS
any funds that have been allocated, reallocated or transferred to it
under this part or may request additional funds in excess of its current
grant level. Based on this information or on other available
information, FNS shall reallocate, as it determines appropriate, any
funds allocated to State agencies in the current fiscal year which will
not be expended in the following fiscal year and any funds carried over
from the prior fiscal year which will not be expended in the current
fiscal year. Reallocated funds shall be made available for payment to a
State agency upon approval by FNS of the State agency's amendment to the
base year plan which covers the reallocated funds, if applicable.
Notwithstanding any other provision of this part, a State agency may, at
any time, release to FNS for reallocation any funds that have been
allocated, reallocated or transferred to it under this part and are not
needed to implement its approved plan under this section.
(e) Return of funds. (1) In Fiscal Year 1991, up to 25 per cent of
the SAE funds allocated to each State agency under Sec. 235.4 may
remain available for obligation and expenditure in the second fiscal
year of the grant. In subsequent fiscal years, up to 20 percent may
remain available for obligation and expenditure in the second fiscal
year. The maximum amount to remain available will be calculated at the
time of the formula allocation by multiplying the appropriate percentage
by each State agency's formula allocation as provided under Sec.
235.4(a) through (c). At the end of the first fiscal year, the amount
subject to the retention limit is determined by subtracting the amount
reported by the State agency as Total Federal share of outlays and
unliquidated obligations on the fourth quarter Standard Form (SF) 269,
Financial Status Report, from the total amount of SAE funds made
available for that fiscal year (i.e., the formula allocation adjusted
for any transfers or reallocations). However, funds provided under Sec.
235.4(d) are not subject to the retention limit. Any funds in excess of
the amount that remains available to each State agency shall be returned
to FNS.
(2) At the end of the fiscal year following the fiscal year for
which funds were allocated, each State agency shall return any funds
made available which are unexpended.
[[Page 272]]
(3) Return of funds by the State agency shall be made as soon as
practicable, but in any event, not later than 30 days following demand
by FNS.
[Amdt. 14, 51 FR 27151, July 30, 1986, as amended by Amdt. 17, 55 FR
1378, Jan. 16, 1990; 60 FR 15462, Mar. 24, 1995]
[41 FR 32405, Aug. 3, 1976, as amended at 64 FR 50743, Sept. 20, 1999]
Sec. 235.6 Use of funds.
(a) Funds allocated under this part and 7 CFR part 225 shall be used
for State agency administrative costs incurred in connection with the
programs governed by 7 CFR parts 210, 215, 220, 225, 226, and 250 of
this title. Except as provided under Sec. 235.6(c), funds allocated
under Sec. 235.4, paragraphs (a) and (b) and 7 CFR part 225 shall be
used for the program(s) for which allocated, except that the State
agency may transfer funds allocated for any such program(s) to other
such program(s). Subject to the provisions of this paragraph, a State
agency may also transfer SAE funds that are not needed to implement its
approved plan Sec. 235.5(b) to another State agency within the State
that is eligible to receive SAE funds under this part. Up to 25 per cent
of funds allocated under Sec. 235.4(a) through (c) for Fiscal Year 1991
and up to 20 per cent of funds allocated in subsequent fiscal years to a
State agency may, subject to the provisions of Sec. 235.5 of this part,
remain available for obligation and expenditure by such State agency
during the following fiscal year.
(a-1) State administrative expense funds paid to any State may be
used by State agencies to pay salaries, including employee benefits and
travel expenses for administrative and supervisory personnel, for
support services, for office equipment, and for staff development,
particularly for monitoring and training of food service personnel at
the local level in areas such as food purchasing and merchandizing. Such
funds shall be used to employ additional personnel, as approved in the
applicable State plan to supervise, improve management, and give
technical assistance to school food authorities and to institutions in
their initiation, expansion, and conduct of any programs for which the
funds are made available. State agencies may also use these funds for
their general administrative expenses in connection with any such
programs, including travel and related expenses. Additional personnel or
part-time personnel hired are expected to meet professional
qualifications and to be paid at salary scales of positions of
comparable difficulty and responsibility under the State agency.
Personnel may be used on a staff year equivalent basis, thus permitting
new personnel and existing staff to be cross-utilized for most effective
and economical operation under existing and new programs.
(a-2) State Administrative Expense Funds paid to any State agency
under Sec. 235.4(b)(3) shall be available for reviews conducted under
Sec. 210.18 activities associated with carrying out actions to ensure
adherence to the program performance standards.
(b) State administrative expense funds shall be used consistent with
the cost principles and constraints on allowable and unallowable costs
and indirect cost rates as prescribed in Office of Management and Budget
Circular A-87.
(c) In addition to State Administrative Expense funds made available
specifically for food distribution purposes under Sec. 235.4 (b)(2) and
(b)(4), State Administrative Expense funds allocated under Sec. 235.4
(a)(1), (a)(2), (b)(1), (b)(3), and (d), and under (b)(4) for the Child
and Adult Care Food Program may be used to assist in the administration
of the Food Distribution Program (7 CFR part 250) in schools and
institutions which participate in programs governed by parts 210, 220,
and 226 of this title when such Food Distribution Program is
administered within the State agency and may also be used to pay
administrative expenses of a distributing agency, when such agency is
other than the State agency and is responsible for administering all or
part of such Food Distribution Program.
(d) FNS shall allocate, for the purpose of providing grants on an
annual basis to public entities and private nonprofit organizations
participating in projects under section 18(c) of the National School
Lunch Act, not more than $4,000,000 in each of Fiscal Years 1993 and
1994. Subject to the maximum allocation for such projects for each
[[Page 273]]
fiscal year, at the beginning of each of Fiscal Years 1993 and 1994, FNS
shall allocate, from funds available under Sec. 235.5(d) that have not
otherwise been allocated to States, an amount equal to the estimates by
FNS of the funds to be returned under paragraph (a) of this section, but
not less than $1,000,000 in each fiscal year. To the extent that amounts
returned to FNS are less than estimated or are insufficient to meet the
needs of the projects, FNS may allocate amounts to meet the needs of the
projects from funds available under this section that have not been
otherwise allocated to States. FNS shall reallocate any of the excess
funds above the minimum level in accordance with Sec. 235.5(d).
(e) Where State Administrative Expense Funds are used to acquire
personal property or services the provisions of Sec. Sec. 235.9 and
235.10 must be observed.
(f) Each State agency shall adequately safeguard all assets and
assure that they are used solely for authorized purposes.
(g) Whoever embezzles, willfully misapplies, steals, or obtains by
fraud any funds, assets, or property provided under this part, whether
received directly or indirectly from the Department, shall:
(1) If such funds, assets, or property are of a value of $100 or
more, be fined not more than $25,000 or imprisoned not more than five
years or both; or
(2) If such funds, assets, or property are of a value of less than
$100, be fined not more than $1,000 or imprisoned not more than one year
or both.
(h) Whoever receives, conceals, or retains to his use or gain funds,
assets, or property provided under this part, whether received directly
or indirectly from the Department, knowing such funds, assets, or
property have been embezzled, willfully misapplied, stolen, or obtained
by fraud, shall be subject to the same penalties provided in paragraph
(h) of this section.
(Sec. 14, Pub. L. 95-166, 91 Stat. 1338, 1339, 1340 (42 U.S.C. 1751,
1753, 1759a, 1761, 1766, 1772-1775, 1776, 1786); sec. 7(a), Pub. L. 95-
627, 92 Stat. 3621, 3622 (42 U.S.C. 1751, 1776))
[41 FR 32405, Aug. 3, 1976, as amended at 43 FR 37172, Aug. 22, 1978; 44
FR 37901, June 29, 1979; 44 FR 48958, Aug. 21, 1979; 44 FR 51185, Aug.
31, 1979; 45 FR 3566, Jan. 18, 1980; Amdt. 11, 48 FR 27892, June 17,
1983; Amdt. 14, 51 FR 27152, July 30, 1986; 56 FR 32949, July 17, 1991;
60 FR 15462, Mar. 24, 1995; 60 FR 57148, Nov. 14, 1995; 64 FR 50744,
Sept. 20, 1999]
Sec. 235.7 Records and reports.
(a) Each State agency shall keep records on the expenditure of State
administrative expense funds provided under this part and part 225 of
this title. Such records shall conform with the applicable State plan
for use of State administrative expense funds. The State agency shall
make such records available, upon a reasonable request, to FNS, OIG, or
the U.S. Comptroller General and shall maintain current accounting
records of State administrative expense funds which shall adequately
identify fund authorizations, obligations, unobligated balances, assets,
liabilities, outlays and income. The records may be kept in their
original form or on microfilm, and shall be retained for a period of
three years after the date of the submission of the final Financial
Status Report, subject to the exceptions noted below:
(1) If audit findings have not been resolved, the records shall be
retained beyond the three-year period as long as required for the
resolution of the issues raised by the audit.
(2) Records for nonexpendable property acquired with State
Administrative Expense Funds shall be retained for three years after its
final disposition.
(b) Each State agency shall submit to FNS a quarterly Financial
Status Report (SF-269) on the use of State administrative expense funds
provided for each fiscal year under this part. Reports shall be
postmarked and/or submitted to FNS no later than 30 days after the end
of each quarter of the fiscal year and, in case of funds carried over
under Sec. 235.6(a), each quarter of
[[Page 274]]
the following fiscal year until all such funds have been obligated and
expended. Obligations shall be reported for the fiscal year in which
they occur. Each State agency shall submit a final Financial Status
Report for each fiscal year's State administrative expense funds. This
report shall be postmarked and/or submitted to FNS no later than 30 days
after the end of the fiscal year following the fiscal year for which the
funds were initially made available. Based on guidance provided by FNS,
each State agency shall also use the quarterly SF-269 to report on the
use of State funds provided during the fiscal year. Each State agency
shall also submit an annual report containing information on School Food
Authorities under agreement with the State agency to participate in the
National School Lunch or Commodity School programs.
(c) State agencies operating those programs governed by parts 210,
215, 220 and 226 and those State agencies which are distributing
agencies eligible for SAE funds shall participate in surveys and studies
of programs authorized under the National School Lunch Act, as amended,
and the Child Nutrition Act of 1966, as amended, when such studies and
surveys are authorized by the Secretary of Agriculture. The
aforementioned State agencies shall encourage individual School Food
Authorities, child and adult care institutions, and distributing
agencies (as applicable) to participate in such studies and surveys.
Distribution of State Administrative Expense funds to an individual
State agency is contingent upon that State agency's cooperation in such
studies and surveys.
(Sec. 14, Pub. L. 95-166, 91 Stat. 1338 (42 U.S.C. 1776); sec. 7, Pub.
L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776); 93 Stat. 837, Pub. L. 96-108
(42 U.S.C. 1776); secs. 804, 816, 817 and 819, Pub. L. 97-35, 95 Stat.
521-535 (42 U.S.C. 1753, 1756, 1759, 1771, 1773 and 1785); sec. 7(a),
Pub. L. 95-627, 92 Stat. 3622, 42 U.S.C. 1751)
[41 FR 32405, Aug. 3, 1976, as amended at 43 FR 37173, Aug. 22, 1978; 44
FR 48958, Aug. 21, 1979; 45 FR 8563, Feb. 8, 1980; Amdt. 9, 48 FR 195,
Jan. 4, 1983; Amdt. 11, 48 FR 27892, June 17, 1983; Amdt. 12, 49 FR
18989, May 4, 1984; Amdt. 14, 51 FR 27152, July 30, 1986; Amdt. 17, 55
FR 1378, Jan. 16, 1990; 60 FR 15463, Mar. 24, 1995]
Sec. 235.8 Management evaluations and audits.
(a) Each State agency shall provide for audits of State agency
operations under this part to be made with reasonable frequency, but
beginning in fiscal year 1978 once every two years. The audits shall
determine the fiscal integrity of financial transactions and reports,
and the compliance with applicable laws and regulations and with the
administrative requirements set forth in 7 CFR part 3015. Audits may be
made by State Auditors General, by State Controllers, or other
comparable State audit groups, or by Certified Public Accountants or
State licensed public accountants.
(b) Each State agency shall develop a plan for the conduct of such
audits which shall (1) provide a description of the State agency in
adequate detail to demonstrate the independence of the audit
organization, and (2) provide a systematic method to assure timely and
appropriate resolution of audit findings and recommendations.
(c) While OA shall rely to the fullest extent feasible upon State
sponsored audits, it shall, whenever considered necessary, (1) perform
on-site test audits, and (2) review audit reports and related working
papers of audits performed by or for State agencies.
(d) Use of audit guides available from OA is encouraged. When these
guides are utilized, OA will coordinate its audits with State sponsored
audits to form a network of intergovernmental audit systems.
(e) Each State agency shall provide FNS with full opportunity to
conduct management evaluations of all operations of the State agency
under this part and shall provide OA with full opportunity to conduct
audits of all such operations. Each State agency shall make available
its records, including records of the receipt and expenditure of funds,
upon a reasonable request by
[[Page 275]]
FNS, OA, or the U.S. Comptroller General.
(Sec. 7, Pub. L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776); secs. 804, 805,
812, 814, 816, 817 and 819, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C.
1753, 1754, 1756, 1759, 1759a, 1771, 1773, 1774, 1776, and 1785))
[41 FR 32405, Aug. 3, 1976, as amended at 44 FR 51186, Aug. 31, 1979;
Amdt. 7, 47 FR 18567, Apr. 30, 1982; Amdt. 9, 48 FR 195, Jan. 4, 1983;
54 FR 2991, Jan. 23, 1989]
Sec. 235.9 Procurement and property management standards.
(a) Requirements. State agencies shall comply with the requirements
of the Office of Management and Budget (OMB) Circular A-102 and the
Department's Uniform Federal Assistance Regulations, 7 CFR part 3015,
subpart S (46 FR 55658) concerning the procurement of supplies,
equipment and other services with State Administrative Expense Funds.
These requirements are adopted by FNS to ensure that such materials and
services are obtained for the Program efficiently and economically and
in compliance with applicable laws and executive orders.
(b) Contractual responsibilities. The standards contained in OMB
Circular A-102 and 7 CFR part 3015 do not relieve the State agency of
any contractual responsibilities under its contract. The State agency is
the responsible authority, without recourse to FNS, regarding the
settlement and satisfaction of all contractual and administrative issues
arising out of procurements entered into in connection with the Program.
This includes, but is not limited to source evaluation, protests,
disputes, claims, or other matters of a contractual nature. Matters
concerning violation of law are to be referred to the local, State or
Federal authority that has proper jurisdiction.
(c) Procurement procedure. The State agency may use its own
procurement procedures which reflect applicable State and local laws and
regulations, provided that procurements made with Program funds adhere
to the standards set forth in OMB Circular A-102 and 7 CFR part 3015.
(d) Property acquired with State administrative expense funds. State
Agencies shall comply with the requirements of OMB Circular A-102 and 7
CFR part 3015, subpart R (46 FR 55654) in their utilization and
disposition of property acquired in whole or in part with State
Administrative Expense Funds.
(Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80 Stat.
885-890 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C. 1759))
[Amdt. 9, 48 FR 19355, Apr. 29, 1983]
Sec. 235.10 [Reserved]
Sec. 235.11 Other provisions.
(a) State funds. Expenditures of funds from State sources in any
fiscal year for the administration of the National School Lunch Program,
School Breakfast Program, Special Milk Program, Child and Adult Care
Food Program shall not be less than that expended or obligated in fiscal
year 1977. Failure of a State to maintain this level of funding will
result in the total withdrawal of SAE funds. State agencies shall
follow, as applicable, the provisions of Office of Management and Budget
Circular A-102, Attachments F and G and 7 CFR part 3015, subparts G and
H in identifying and documenting expenditures of funds from State
revenues to meet the State funding requirement of this paragraph.
(b) Sanctions imposed. (1) FNS may recover, withhold or cancel
payment of up to one hundred (100) percent of the funds payable to a
State agency under this part, whenever it is determined by FNS that the
State agency has failed to comply with the requirements contained in
this part and in parts 210, 215, 220 and 226 of this title and in part
250 of this title as it applies to the operation of the Food
Distribution Program in schools and child and adult care institutions.
(2) In addition to the general provisions found in paragraph (b)(1)
of this section, FNS may, for any fiscal year, recover, withhold or
cancel payment of up to thirty-three and one-third (33\1/3\) percent of
the funds payable to, and to be used by, a State agency under Sec.
235.4(a)(1) and Sec. 235.4(b)(3) for administration of school nutrition
programs in FNS determines that a State agency is deficient in one or
more of the following:
(i) Implementing the requirements in Sec. 210.18;
[[Page 276]]
(ii) Conducting the number of reviews required in Sec. 210.18
within the timeframes specified;
(iii) Covering the areas of review set forth in the Sec. 210.18,
carrying out corrective action, and assessing and recovering claims as
prescribed in Sec. 210.18 and Sec. 210.19 of this title;
(iv) Conducting reviews with sufficient thoroughness to identify
violations of the areas of review identified in Sec. 210.18; and
(v) Meeting the reporting deadlines prescribed for the forms (FNS-10
and SF-269) required under Sec. 210.5(d) of this title.
(3) Furthermore, FNS may for any fiscal year, recover, withhold or
cancel payment of up to thirty-three and one-third (33\1/3\) percent of
the funds payable to, and to be used by, a State agency under Sec.
235.4(a)(2), Sec. 235.4(b)(1) and Sec. 235.4(b)(4) for administration
of the Child and Adult Care Food Program if FNS determines that a State
agency is deficient in meeting the reporting deadlines prescribed for
the forms (FNS-44 and SF-269) required under Sec. 226.7(d) of this
title.
(4) In establishing the amounts of funds to be recovered, withheld
or cancelled under paragraph (b)(2) and (b)(3) of this section, FNS
shall determine the current or projected rate of funds usage by the
State agency for all funds subject to sanction, and after considering
the severity and longevity of the cumulative deficiencies, shall apply
an appropriate sanction percentage to the amount so determined. During
the fiscal year under sanction, a State agency may not use funds not
included in the determination of funds usage to replace sanctioned
funds. The maximum sanction percentage that may be imposed against a
State agency for failure within one or more of the five deficiency areas
specified in paragraph (b)(2) of this section for any fiscal year shall
be thirty-three and one-third (33\1/3\) percent of the funds payable
under Sec. 235.4(a)(1) and Sec. 235.4(b)(3) for administration of
school nutrition programs for such fiscal year.
(5) Before carrying out any sanction against a State agency under
this section, the following procedures shall be implemented:
(i) FNS shall notify the Chief State School Officer or equivalent of
the deficiencies found and of its intention to impose sanctions unless
an acceptable corrective action plan is submitted and approved by FNS
within 60 calendar days.
(ii) The State agency shall develop a corrective action plan with
specific timeframes to correct the deficiencies and/or prevent their
future recurrence. The plan will include dates by which the State agency
will accomplish such corrective action.
(iii) FNS shall review the corrective action plan. If it is
acceptable, FNS shall issue a letter to the Chief State School Officer
or equivalent approving the corrective action plan, and detailing the
technical assistance that is available to the State agency to correct
the deficiencies. The letter shall advise the Chief State School Officer
or equivalent of the specific sanctions to be imposed if the corrective
action plan is not implemented within timeframes set forth in the
approved plan.
(iv) Upon advice from the State agency that corrective action has
been taken, FNS shall assess such action and, if necessary, shall
perform a follow-up review to determine if the noted deficiencies have
been corrected. FNS shall then advise the State agency if the actions
taken are in compliance with the corrective action plan or if additional
corrective action is needed.
(v) If an acceptable corrective action plan is not submitted and
approved within 60 calendar days, or if corrective action is not
completed within the time limits established in the corrective action
plan, FNS may impose a sanction by assessing a claim against the State
agency or taking action in accordance with 7 CFR part 3015, subpart L.
FNS shall notify the Chief State School Officer or equivalent of any
such action.
(vi) If, subsequent to the imposition of any sanction, FNS
determines that the noted deficiencies have been resolved and that the
programs for which SAE funds were made available are being operated in
an acceptable manner, FNS may return to the State agency or restore to
the State agency's Letter of Credit (LOC) part or all of any sanctioned
SAE funds.
[[Page 277]]
(6) In carrying out sanctions under this part for any fiscal year,
FNS may reduce the amount of allocated SAE funds payable to a State
agency in whole or in part during such fiscal year and during following
fiscal years if necessary.
(7) Any State agency which has a sanction imposed against it in
accordance with this paragraph shall not be eligible to participate in
any reallocation of SAE funds under Sec. 235.5(d) of this part during
any fiscal year in which such sanction is being applied.
(c) Termination for convenience. FNS and the State agency may
terminate the State agency's participation under this part in whole, or
in part, when both parties agree that continuation would not produce
beneficial results commensurate with the further expenditure of funds.
The two parties shall agree upon the termination conditions, including
the effective date and, in the case of partial termination, the portion
to be terminated. The State agency shall not incur new obligations for
the terminated portion after the effective date, and shall cancel as
many outstanding obligations as possible. FNS shall allow full credit to
the State agency for the Federal share of the noncancellable
obligations, properly incurred by the State agency prior to termination.
(d) In taking any action under paragraphs (b) or (c) of this
section, FNS and the State agency shall comply with the provisions of
the Department's Uniform Federal Assistance Regulations, 7 CFR part 3015
subpart N concerning grant suspension, termination and closeout
procedures.
(e) State requirements. Nothing contained in this part shall prevent
a State agency from imposing additional operating requirements which are
not inconsistent with the provisions of this part.
(f) Administrative review process. When FNS asserts a sanction
against a State agency under the provisions of paragraph (b) of this
section, the State agency may appeal the case and be afforded a review
by an FNS Administrative Review Officer of the record including any
additional written submissions prepared by the State agency.
(1) FNS shall provide a written notice and shall ensure the receipt
of such notice when asserting a sanction against a State agency.
(2) A State agency aggrieved by a sanction asserted against it may
file a written request with the Director, Administrative Review Staff,
U.S. Department of Agriculture, Food and Nutrition Service, 3101 Park
Center Drive, Alexandria, Va. 22302 for a review of the record. Such
request must be postmarked within 30 calendar days of the date of
delivery of the sanction notice and the envelope containing the request
shall be prominently marked ``REQUEST FOR REVIEW.'' If the State agency
does not request a review within 30 calendar days of the date of
delivery of the sanction notice, the administrative decision on the
sanction shall be final.
(3) Upon receipt of a request for review, FNS shall promptly provide
the State agency with a written acknowledgment of the request. The
acknowledgment shall include the name and address of the FNS
Administrative Review Officer reviewing the sanction. The acknowledgment
shall also notify the State agency that any additional information in
support of its position must be submitted within 30 calendar days of the
receipt of the acknowledgment.
(4) When a review is requested, the FNS Administrative Review
Officer shall review all available information and shall make a final
determination within 45 calendar days after receipt of the State
agency's additional information. The final determination shall take
effect upon delivery of the written notice of this final decision to the
State agency.
(5) The final determination of the FNS Administrative Review Officer
will be the Department's final decision
[[Page 278]]
in the case and will not be subject to reconsideration.
(Sec. 14, Pub. L. 95-166, 91 Stat. 1338 (42 U.S.C. 1776); sec. 7, Pub.
L. 95-627, 92 Stat. 3621 (42 U.S.C. 1776); secs. 805 and 819, Pub. L.
97-35, 95 Stat. 521-535 (42 U.S.C. 1773); sec. 7(a), Pub. L. 95-627, 93
Stat. 3622, 42 U.S.C. 1751)
[41 FR 32405, Aug. 3, 1976, as amended at 44 FR 48958, Aug. 21, 1979;
Amdt. 6, 47 FR 14135, Apr. 2, 1982; Amdt. 11, 48 FR 27892, June 17,
1983; Amdt. 12, 49 FR 18989, May 4, 1984; Amdt. 14, 51 FR 27152, July
30, 1986; Amdt. 15, 51 FR 33862, Sept. 24, 1986; Amdt. 17, 55 FR 1378,
Jan. 16, 1990; 56 FR 32950, July 17, 1991; 60 FR 15463, Mar. 24, 1995;
64 FR 50744, Sept. 20, 1999]
Sec. 235.12 Information collection/recordkeeping--OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control
number
------------------------------------------------------------------------
235.3(b)................................................... 0584-0067
235.4(d), (e).............................................. 0584-0067
235.7(a)................................................... 0584-0067
235.7(b)................................................... 0584-0067
235.7(c)................................................... 0584-0067
235.8(a), (b).............................................. 0584-0067
235.9(c), (d).............................................. 0584-0067
235.11(b)(2)............................................... 0584-0067
235.11(b)(5)(ii)........................................... 0584-0067
235.11(f).................................................. 0584-0067
------------------------------------------------------------------------
[64 FR 50744, Sept. 20, 1999]
PART 240_CASH IN LIEU OF DONATED FOODS--Table of Contents
Sec.
240.1 General purpose and scope.
240.2 Definitions.
240.3 Cash in lieu of donated foods for program schools.
240.4 Cash in lieu of donated foods for nonresidential child and adult
care institutions.
240.5 Cash in lieu of donated foods for commodity schools.
240.6 Funds for States which have phased out facilities.
240.7 Payments to States.
240.8 Payments to program schools, service institutions, nonresidential
child care institutions and commodity schools.
240.9 Use of funds.
240.10 Unobligated funds.
240.11 Records and reports.
Authority: 42 U.S.C. 612c note, 1751, 1755, 1762a, 1765, 1766, 1779.
Source: 47 FR 15982, Apr. 13, 1982, unless otherwise noted.
Sec. 240.1 General purpose and scope.
(a) Each school year the Department programs agricultural
commodities and other foods to States for delivery to program and
commodity schools, nonresidential child care institutions, and service
institutions pursuant to the regulations governing the donation of foods
for use in the United States, its territories and possessions and areas
under its jurisdiction (7 CFR part 250).
(b) Section 6(b) of the Act requires that not later than June 1 of
each school year, the Secretary shall make an estimate of the value of
the agricultural commodities and other foods that will be delivered
during that school year for use in lunch programs by schools
participating in the National School Lunch Program (7 CFR part 210). If
this estimate is less than the total level of assistance authorized
under section 6(e) of the Act the Secretary shall pay to the State
administering agency not later than July 1 of that school year, an
amount of funds equal to the difference between the value of donated
foods as then programmed for that school year and the total level of
assistance authorized under such section.
(c) Section 6(e)(1) of the Act requires:
(1) That for each school year, the total commodity assistance, or
cash in lieu thereof, available to each State for the National School
Lunch Program shall be the amount obtained by multiplying the national
average value of donated foods, described in paragraph (c)(2) of this
section, by the number of lunches served in that State in the preceding
school year; and
(2) That the national average value of foods donated to schools
participating in the National School Lunch Program, or cash payments
made in lieu thereof, shall be 11 cents, adjusted on July 1, 1982, and
each July 1 thereafter to reflect changes in the Price Index for Food
Used in Schools and Institutions. Section 6(e)(1) further requires that
not less than 75 percent of the assistance under that section shall be
in the form of donated foods for the National School Lunch Program.
After the end of each school year, FNS shall reconcile the number of
lunches served by schools in each State with the number
[[Page 279]]
served in the preceding school year and, based on such reconciliation,
shall increase or reduce subsequent commodity assistance or cash in lieu
thereof provided to each State.
(d) Section 12(g) of the Act provides that whoever embezzles,
willfully misapplies, steals, or obtains by fraud any funds, assets, or
property that are the subject of a grant or other form of assistance
under this Act or the Child Nutrition Act of 1966, whether received
directly or indirectly from the United States Department of Agriculture,
or whoever receives, conceals, or retains such funds, assets, or
property to his use or gain, knowing such funds, assets, or property
have been embezzled, willfully misapplied, stolen, or obtained by fraud
shall, if such funds, assets, or property are of the value of $100 or
more, be fined not more than $10,000 or imprisoned not more than five
years, or both, or, if such funds, assets, or property are of a value of
less than $100, shall be fined not more than $1,000 or imprisoned for
not more than one year, or both.
(e) Section 14(f) of the Act provides that the value of foods
donated to States for use in commodity schools for any school year shall
be the sum of the national average value of donated foods established
under section 6(e) of the Act and the national average payment
established under section 4 of the Act. Section 14(f) also provides that
such schools shall be eligible to receive up to five cents of such value
in cash for processing and handling expenses related to the use of the
donated foods.
(f) Sections 17(h)(1) (B) and (C) of the Act provide that the value
of commodities, or cash in lieu thereof, donated to States for use in
nonresidential child or adult care institutions participating in the
Child and Adult Care Food Program (7 CFR part 226) for any school year
shall be, at a minimum, the amount obtained by multiplying the number of
lunches and suppers served during the preceding school year by the rate
established for lunches for that school year under section 6(e) of the
Act. At the end of each school year, FNS shall reconcile the number of
lunches and suppers served in participating institutions in each State
during such school year with the number of lunches and suppers served in
the preceding school year and, based on such reconciliation, shall
increase or reduce subsequent commodity assistance or cash in lieu of
commodities provided to each State.
(g) Section 16 of the Act provides that a State which has phased out
its food distribution facilities prior to June 30, 1974, may elect to
receive cash payments in lieu of donated foods for the purposes of the
applicable child nutrition programs--i.e., the National School Lunch
Program, the Summer Food Service Program for Children (7 CFR part 225)
and the Child Care Food Program.
(h) These regulations prescribe the methods for determination of the
amount of payments, the manner of disbursement and the requirements for
accountability for funds when these respective statutory authorities
require the Department to make cash payments in lieu of donating
agricultural commodities and other foods.
[47 FR 15982, Apr. 13, 1982, as amended at 52 FR 7267, Mar. 10, 1987; 58
FR 39120, July 22, 1993]
Sec. 240.2 Definitions.
For the purpose of this part the term:
Act means the National School Lunch Act, as amended.
Child Care Food Program means the Program authorized by section 17
of the Act.
Commodity school means a school that does not participate in the
National School Lunch Program under part 210 of this chapter but which
operates a nonprofit lunch program under agreement with the State
educational agency or FNSRO and receives donated foods, or donated foods
and cash or services of a value of up to 5 cents per lunch in lieu of
donated foods under this part for processing and handling the foods.
Department means the U.S. Department of Agriculture.
Distributing agencies means State, Federal or private agencies which
enter into agreements with the Department for the distribution of
donated foods to program schools, commodity schools, and nonresidential
child care institutions.
[[Page 280]]
Donated-food processing and handling expenses means any expenses
incurred by or on behalf of a commodity school for processing or other
aspects of the preparation, delivery, and storage of donated foods for
use in its lunch program.
Donated foods means foods donated, or available for donation, by the
Department under any of the legislation referred to in part 250 of this
chapter.
Fiscal year means the period of 12 months beginning October 1 of any
calendar year and ending September 30 of the following calendar year.
FNS means the Food and Nutrition Service of the Department.
FNSRO means the appropriate Food and Nutrition Service Regional
Office.
National School Lunch Program means the Program authorized by
sections 4 and 11 of the Act.
Nonprofit means exempt from income tax under section 501(c)(3) of
the Internal Revenue Code of 1954, as amended; or in the Commonwealth of
Puerto Rico, certified as nonprofit by its Governor.
Nonresidential child care institution means any child care center,
day care home, or sponsoring organization (as those terms are defined in
part 226 of this chapter) which participates in the Child Care Food
Program.
Program school means a school which participates in the National
School Lunch Program.
School means (1) an educational unit of high school grade or under
except for a private school with an average yearly tuition exceeding
$1,500 per child, operating under public or nonprofit private ownership
in a single building or complex of buildings. The term ``high school
grade or under'' includes classes of preprimary grade when they are
conducted in a school having classes of primary or higher grade, or when
they are recognized as a part of the educational system in the State,
regardless of whether such preprimary grade classes are conducted in a
school having classes of primary or higher grade; (2) with the exception
of residential summer camps which participate in the Summer Food Service
Program for Children, Job Corps centers funded by the Department of
Labor and private foster homes, any public or nonprofit private child
care institution, or distinct part of such institution, which (i)
maintains children in residence, (ii) operates principally for the care
of children, and (iii) if private, is licensed to provide residential
child care services under the appropriate licensing code by the State or
a subordinate level of government. The term ``child care institutions''
includes, but is not limited to: homes for the mentally retarded, the
emotionally disturbed, the physically handicapped, and unmarried mothers
and their infants; group homes; halfway houses; orphanages; temporary
shelters for abused children and for runaway children; long-term care
facilities for chronically ill children; and juvenile detention centers;
and (3) with respect to the Commonwealth of Puerto Rico, nonprofit child
care centers certified as such by the Governor of Puerto Rico.
School food authority means the governing body which is responsible
for the administration of one or more schools and which has the legal
authority to operate a nonprofit lunch program therein.
School year means the period of 12 months beginning July 1 of any
calendar year and ending June 30 of the following calendar year.
Secretary means the Secretary of Agriculture.
Service institutions means camps or sponsors (as those terms are
defined in part 225 of this chapter) which participate in the Summer
Food Service Program for Children.
Special needs children means children who are emotionally, mentally
or physically handicapped.
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American-Samoa,
the Trust Territory of the Pacific Islands, or the Commonwealth of the
Northern Mariana Islands.
State agency means the State educational agency or such other agency
of the State as has been designated by the Governor or other appropriate
executive or legislative authority of the State and approved by the
Department to administer, in the State, the National School Lunch
Program, the Child Care Food Program, the Summer
[[Page 281]]
Food Service Program for Children, or nonprofit lunch programs in
commodity schools.
State educational agency means, as the State legislature may
determine, (1) the chief State school officer (such as the State
Superintendent of Public Instruction, Commissioner of Education, or
similar officer), or (2) a board of education controlling the State
Department of Education.
Summer Food Service Program for Children means the Program
authorized by section 13 of the Act.
Tuition means any educational expense required by the school as part
of the students' educational program; not including transportation fees
for commuting to and from school, and the cost of room and board. The
following monies shall not be included when calculating a school's
average yearly tuition per child:
(1) Academic scholarship aid from public or private organizations or
entities given to students, or to schools for students, and (2) state,
county or local funds provided to schools operating principally for the
purpose of educating handicapped or other special needs children for
whose education the State, county or local government is primarily or
solely responsible. In a school which varies tuition, the average yearly
tuition shall be calculated by dividing the total tuition receipts for
the current school year by the total number of students enrolled for
purposes of determining if the average yearly tuition exceeds $1,500 per
child.
Sec. 240.3 Cash in lieu of donated foods for program schools.
(a) Not later than June 1 of each school year, FNS shall make an
estimate of the value of agricultural commodities and other foods that
will be delivered to States during the school year under the food
distribution regulations (7 CFR part 250) for use in program schools. If
the estimated value is less than the total value of assistance
authorized under section 6(e) of the Act for the National School Lunch
Program, FNS shall determine the difference between the value of the
foods then programmed for each State for the school year and the
required value and shall pay the difference to each State agency not
later than July 1 of that school year.
(b) Notwithstanding any other provision of this section, in any
State in which FNS administers the National School Lunch Program in any
of the schools of the State, FNS shall withhold from the funds payable
to that State under this section an amount equal to the ratio of the
number of lunches served in schools in which the program is administered
by FNS to the total number of lunches served in all program schools in
the State.
[47 FR 15982, Apr. 13, 1982, as amended at 52 FR 7267, Mar. 10, 1987; 58
FR 39120, July 22, 1993]
Sec. 240.4 Cash in lieu of donated foods for nonresidential child and
adult care institutions.
(a) For each school year any State agency may, upon application to
FNS prior to the beginning of the school year, elect to receive cash in
lieu of donated foods for use in nonresidential child care or adult care
institutions participating in the Child and Adult Care Food Program. FNS
shall pay each State agency making such election, at a minimum, an
amount calculated by multiplying the number of lunches and suppers
served in the State's nonresidential child and adult care institutions
which meet the meal pattern requirements prescribed in the regulations
for the Child and Adult Care Food Program under part 226 of this chapter
by the national average value of donated food prescribed in section
6(e)(1) of the Act. However, if a State agency has elected to receive a
combination of donated foods and cash, the required amount shall be
reduced based upon the number of such lunches and suppers served for
which the State receives donated foods.
(b) Notwithstanding any other provision of this section in any State
in which FNS administers the Child Care Food Program in any
nonresidential child care institution, FNS shall withhold from the funds
payable to such State under this section an amount equal to the ratio of
the number of lunches and suppers served in such institutions in which
the program is administered by the FNS and for which cash payments are
provided to the
[[Page 282]]
total number of lunches and suppers served in that program and for which
cash in lieu of payments are received, in all nonresidential child care
institutions in the State.
[47 FR 15982, Apr. 13, 1982, as amended at 58 FR 39120, July 22, 1993]
Sec. 240.5 Cash in lieu of donated foods for commodity schools.
(a) The school food authority of a commodity school may elect (1) to
receive cash payments in lieu of up to five cents per lunch of the value
specified in Sec. 250.4(b)(2)(ii) of this chapter to be used for
donated-food processing and handling expenses, or (2) to have such
payments retained for use on its behalf by the State agency. The school
food authority shall consult with commodity schools before making the
election.
(b) When a school food authority makes an election regarding receipt
of cash payments and the amount of any payments to be received under
this paragraph, such election shall be binding on the school food
authority for the school year to which the election applies.
(c) The State agency shall (1) no later than May 14, 1982 for the
school year ending June 30, 1982, and no later than August 15 of each
subsequent school year, contact all school food authorities of commodity
schools to learn their election regarding cash payments under this
section and the amount of any such payments, and (2) forward this
information to the distributing agency and FNSRO, in accordance with
Sec. 210.14(d)(2) of this chapter.
Sec. 240.6 Funds for States which have phased out facilities.
Notwithstanding any other provision of this part, any State which
phased out its food distribution facilities prior to June 30, 1974, may,
for purposes of the National School Lunch Program, the Summer Food
Service Program for Children, and the Child Care Food Program, elect to
receive cash payments in lieu of donated foods. Where such an election
is made, FNS shall make cash payments to such State in an amount
equivalent in value to the donated foods (or cash in lieu thereof) to
which the State would otherwise have been entitled under section 6(e) of
the Act, if it had retained its food distribution facilities, except
that the amount may be based on the number of meals served in the
current school year, rather than on the number of meals served in the
preceding school year with a subsequent reconciliation.
[47 FR 15982, Apr. 13, 1982, as amended at 58 FR 39120, July 22, 1993]
Sec. 240.7 Payments to States.
(a) Funds to be paid to any State agency under Sec. 240.3 of this
part for disbursement to program schools shall be made available by
means of United States Treasury Department checks. The State agency
shall use the funds received without delay for the purpose for which
issued.
(b) Funds to be paid to any State agency under Sec. 240.4(a) for
disbursement to nonresidential child care institutions and funds to be
paid to any State agency under Sec. 240.6 for disbursement to program
schools, service institutions, or nonresidential child care institutions
shall be made available by means of Letters of Credit issued by FNS in
favor of the State agency. The State agency shall:
(1) Obtain funds needed to pay school food authorities,
nonresidential child care institutions, and service institutions, as
applicable through presentation by designated State Officials of a
Payment Voucher on Letter of Credit (Treasury Form GFO 7578) in
accordance with procedures prescribed by FNS and approved by the United
States Treasury Department;
(2) Submit requests for funds on a monthly basis in such amounts as
necessary to make payments with respect to meals served the previous
month;
(3) Use the funds received without delay for the purpose for which
drawn.
(c) FNS shall make any cash payments elected under Sec. 240.5 of
this part by increasing the amount of the Letter of Credit or, where
applicable, of the Federal Treasury check, in accordance with the
information provided under Sec. 240.5(c) of this part.
(d) Funds received by State agencies pursuant to this part for
disbursement to program schools and to commodity schools shall not be
subject to the
[[Page 283]]
matching provisions of Sec. 210.6 of part 210 of this chapter.
Sec. 240.8 Payments to program schools, service institutions,
nonresidential child care institutions and commodity schools.
(a) Each State agency shall promptly and equitably disburse any cash
received in lieu of donated foods under this part to eligible program
schools, service institutions and nonresidential child care
institutions, as applicable. Funds withheld from States under Sec.
240.3 and Sec. 240.4 shall be disbursed to eligible program schools,
service institutions, and nonresidential child care institutions by
FNSRO's in the same manner.
(b) Unless the school food authority of a commodity school elects to
have cash payments for donated-food processing and handling expenses
retained for use on its behalf by the State agency, the State agency
shall make such payments to the school food authority of such a school
on a monthly basis in an amount equal to the number of lunches served
(as reported in accordance with Sec. 210.13(a) of this chapter) times
the value per lunch elected by the school food authority in accordance
with Sec. 240.5 of this part. For the period November 11, 1981, through
the close of the month in which this part is published in the Federal
Register, a retroactive payment shall be made, where applicable, to the
school food authority of a commodity school based on the number of
lunches served during that period which meet the nutritional
requirements specified in Sec. 210.10 of this chapter.
Sec. 240.9 Use of funds.
(a) Funds made available to school food authorities (for program
schools), service institutions and nonresidential child care
institutions under this part shall be used only to purchase United
States agricultural commodities and other foods for use in their food
service under the National School Lunch Program, Child Care Food
Program, or Summer Food Service Program for Children, as applicable.
Such foods shall be limited to those necessary to meet the requirements
set forth in Sec. 210.10 of part 210 of this chapter, Sec. 225.10 of
part 225 of this chapter and Sec. 226.10 of part 226 of this chapter,
respectively. On or before disbursing funds to school food authorities
(for program schools), service institutions and nonresidential child
care institutions, State agencies and FNSRO's shall notify them of the
reason for special disbursement, the purpose for which these funds may
be used, and, if possible, the amount of funds they will receive.
(b) Cash payments received under Sec. 240.5 of this part shall be
used only to pay donated-food processing and handling expenses of
commodity schools.
(c) Funds provided under this part shall be subject to the
Department's Uniform Federal Assistance Regulations (7 CFR part 3015).
Sec. 240.10 Unobligated funds.
State agencies shall release to FNS any funds paid to them under
this part which are unobligated at the end of each fiscal year. Release
of funds by any State agency shall be made as soon as practicable, but
in any event, not later than 30 days following demand by FNS. Release of
funds shall be reflected by a related adjustment in the State agency's
Letter of Credit where appropriate or payment by State check where the
funds have been paid by United States Treasury Department check.
Sec. 240.11 Records and reports.
(a) State agencies and distributing agencies shall maintain records
and reports on the receipt and disbursement of funds made available
under this part, and shall retain such records and reports for a period
of three years after the end of the fiscal year to which they pertain,
except that, if audit findings have not been resolved, the records shall
be retained beyond the three-year period as long as required for the
resolution of the issues raised by the audit.
(b) State agencies shall establish controls and procedures which
will assure that the funds made available under this part are not
included in determining the State's matching requirements under Sec.
210.6 of part 210 of this chapter.
[[Page 284]]
PART 245_DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS AND
FREE MILK IN SCHOOLS--Table of Contents
Sec.
245.1 General purpose and scope.
245.2 Definitions.
245.3 Eligibility standards and criteria.
245.4 Exceptions for Puerto Rico and the Virgin Islands.
245.5 Public announcement of the eligibility criteria.
245.6 Certification of children for free and reduced price meals and
free milk.
245.6a Verification requirements.
245.7 Hearing procedure for families and School Food Authorities.
245.8 Nondiscrimination practices for children eligible to receive free
and reduced price meals and free milk.
245.9 Special assistance certification and reimbursement alternatives.
245.10 Action by School Food Authorities.
245.11 Action by State agencies and FNSROs.
245.12 Fraud penalties.
245.13 Information collection/recordkeeping--OMB assigned control
numbers.
Authority: 42 U.S.C. 1752, 1758, 1759a, 1772, 1773, and 1779.
Sec. 245.1 General purpose and scope.
(a) This part established the responsibilities of State agencies,
Food and Nutrition Service Regional Offices (where applicable), and
School Food Authorities in providing free and reduced price meals and
free milk in the National School Lunch Program (7 CFR part 210), the
School Breakfast Program (7 CFR part 220), the Special Milk Program for
Children (7 CFR part 215), and commodity schools. Section 9 of the
National School Lunch Act, as amended, and sections 3 and 4 of the Child
Nutrition Act of 1966, as amended, require schools participating in any
of the programs and commodity schools to make available, as applicable,
free and reduced price lunches, breakfasts, and at the option of the
School Food Authority for schools participating only in the Special Milk
Program free milk to eligible children.
(b) This part sets forth the responsibilities under these Acts of
State agencies, the Food and Nutrition Service Regional Offices, and
School Food Authorities with respect to the establishment of income
guidelines, determination of eligibility of children for free and
reduced price meals, and for free milk and assurance that there is no
physical segregation of, or other discrimination against, or overt
identification of children unable to pay the full price for meals or
milk.
(Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758))
[Amdt. 6, 39 FR 30337, Aug. 22, 1974, as amended by Amdt. 10, 41 FR
28783, July 13, 1976; 47 FR 31852, July 23, 1982]
Sec. 245.2 Definitions.
(a) Adult means any individual 21 years of age or older.
(a-1) Commodity school means a school which does not participate in
the National School Lunch Program under part 210 of this chapter, but
which enters into an agreement as provided in Sec. 210.15a(b) to
receive commodities donated under part 250 of this chapter for a
nonprofit lunch program.
(a-2) Current income means income, as defined in Sec. 245.6(a),
received during the month prior to application. If such income does not
accurately reflect the household's annual rate of income, income shall
be based on the projected annual household income. If the prior year's
income provides an accurate reflection of the household's current annual
income, the prior year may be used as a base for the projected annual
rate of income.
(a-3) Disclosure means individual children's program eligibility
information obtained through the free and reduced price meal or free
milk eligibility process that is revealed or used for a purpose other
than for the purpose for which the information was obtained. The term
refers to access, release, or transfer of personal data about children
by means of print, tape, microfilm, microfiche, electronic communication
or any other means.
(a-4) Documentation means:
(1) The completion of a free and reduced price school meal or free
milk application which includes:
(i) For households applying on the basis of income and household
size, names of all household members; income received by each household
member, identified by source of the income
[[Page 285]]
(such as earnings, wages, welfare, pensions, support payments,
unemployment compensation, and social security and other cash income);
the signature of an adult household member; and the social security
number of the adult household member who signs the application or an
indication that he/she does not possess a social security number; or
(ii) For a child who is a member of a food stamp, FDPIR or TANF
household: the child's name and appropriate food stamp or TANF case
number or FDPIR case number or other identifier; and the name and
signature of an adult household member; and
(2) In lieu of completion of the free and reduced price application,
information obtained from the State or local agency responsible for the
Food Stamp Program, FDPIR or TANF which includes the name of the child;
a statement certifying that the child is a member of a currently
certified food stamp, FDPIR or TANF household; information in sufficient
detail to match the child attending school in the school food authority
with the name of the child certified as a member of a food stamp, FDPIR
or TANF household; the signature or a copy of the signature of the
individual authorized to provide the certification on behalf of the Food
Stamp, FDPIR or TANF office, as appropriate; and the date. When the
signature is impracticable to obtain, such as in a computer match, other
arrangements may be made to ensure that a responsible official can
attest to the data.
(b) Family means a group of related or nonrelated individuals, who
are not residents of an institution or boarding house, but who are
living as one economic unit.
(b-1) FDPIR means the food distribution program for households on
Indian reservations operated under part 253 of this title.
(b-2) FNS means the Food and Nutrition Service, United States
Department of Agriculture.
(b-3) FNSRO where applicable means the appropriate Food and
Nutrition Service Regional Office when that agency administers the
National School Lunch Program, School Breakfast Program or Special Milk
Program with respect to nonprofit private schools.
(c) Food Stamp Household means any individual or group of
individuals which is currently certified to receive assistance as a
household under the Food Stamp Program.
(d) Free meal means a meal for which neither the child nor any
member of his family pays or is required to work in the school or in the
school's food service.
(d-1) Free milk means milk served under the regulations governing
the Special Milk Program and for which neither the child nor any member
of his family pays or is required to work in the school or in the
school's food service.
(d-2) Household means ``family'' as defined in Sec. 245.2(b).
(e) Income eligibility guidelines means the family-size income
levels prescribed annually by the Secretary for use by States in
establishing eligibility for free and reduced price meals and for free
milk.
(f) Meal means a lunch or meal supplement or a breakfast which meets
the applicable requirements prescribed in Sec. Sec. 210.10, 210.15a,
and 220.8 of this chapter.
(f-1) Medicaid means the State medical assistance program under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(f-2) Milk means pasteurized fluid types of unflavored or flavored
whole milk, lowfat milk, skim milk, or cultured buttermilk which meet
State and local standards for such milk except that, in the meal pattern
for infants (0 to 1 year of age) milk means unflavored types of whole
fluid milk or an equivalent quantity of reconstituted evaporated milk
which meet such standards. In Alaska, Hawaii, American Samoa, Guam,
Puerto Rico, the Trust Territory of the Pacific Islands, and the Virgin
Islands, if a sufficient supply of such types of fluid milk cannot be
obtained, ``milk'' shall include reconstituted or recombined milk. All
milk should contain vitamins A and D at levels specified by the Food and
Drug Administration and consistent with State and local standards for
such milk.
[[Page 286]]
(f-3) Operating day means a day that reimbursable meals are offered
to eligible students under the National School Lunch Program or School
Breakfast Program.
(g) Reduced price meal means a meal which meets all of the following
criteria: (1) The price shall be less than the full price of the meal;
(2) the price shall not exceed 40 cents for a lunch and 30 cents for a
breakfast; and (3) neither the child nor any member of his family shall
be required to supply an equivalent value in work for the school or the
school's food service.
(h) Service institution shall have the meaning ascribed to it in
part 225 of this chapter.
(i) School, school food authority, and other terms and abbreviations
used in this part shall have the meanings ascribed to them in part 210
of this chapter.
(j) Special Assistance Certification and Reimbursement Alternatives
means the three optional alternatives for free and reduced price meal
application and claiming procedures in the National School Lunch Program
and School Breakfast Program which are available to those School Food
Authorities with schools in which at least 80 percent of the enrolled
children are eligible for free or reduced price meals, or schools which
are currently, or who will be serving all children free meals.
(k) State Children's Health Insurance Program (SCHIP) means the
State medical assistance program under title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.).
(l) TANF means the State funded program under part A of title IV of
the Social Security Act that the Secretary determines complies with
standards established by the Secretary that ensure that the standards
under the State program are comparable to or more restrictive than those
in effect on June 1, 1995. This program is commonly referred to as
Temporary Assistance for Needy Families, although States may refer to
the program by another name.
(m) Verification means confirmation of eligibility for free or
reduced price benefits under the National School Lunch Program or School
Breakfast Program. Verification shall include confirmation of income
eligibility and, at State or local discretion, may also include
confirmation of any other information required in the application which
is defined as documentation in Sec. 245.2(a-4). Such verification may
be accomplished by examining information provided by the household such
as wage stubs, or by other means as specified in Sec. 245.6a(b).
However, if a food stamp or TANF case number or a FDPIR case number or
other identifier is provided for a child, verification for such child
shall only include confirmation that the child is included in a
currently certified food stamp, TANF or FDPIR household.
(Secs. 801, 803, 812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753,
1759(a), 1773, 1758))
Editorial Note: For Federal Register citations affecting Sec.
245.2, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 245.3 Eligibility standards and criteria.
(a) Each State agency, or FNSRO where applicable, shall by July 1 of
each year announce family-size income standards to be used by School
Food Authorities of schools under the jurisdiction of such State agency,
or FNSRO where applicable, in making eligibility determinations for free
or reduced price meals and for free milk. Such family size income
standards for free and reduced price meals and for free milk shall be in
accordance with Income Eligibility Guidelines published by the
Department by notice in the Federal Register.
(b) Each School Food Authority shall establish eligibility criteria
for free and reduced price meals and for free milk in conformity with
the family-size income standards prescribed by the State agency, or
FNSRO where applicable, under paragraph (a) of this section. Such
criteria shall:
(1) For all schools under the jurisdiction of the School Food
Authority, specify the uniform family-size income criteria to be used
for determining eligibility for free and reduced price meals in schools
participating in the National School Lunch or School Breakfast Programs
and in commodity-only schools, and for determining eligibility for free
milk when the School
[[Page 287]]
Food Authority has chosen to serve free milk in its schools
participating in the Special Milk Program; and
(2) Provide that all children from a family meeting family-size
income criteria and attending any school under the jurisdiction of the
School Food Authority which participates under the National School Lunch
Program, School Breakfast Program, Special Milk Program, or is a
commodity only school shall be provided the same benefits. The School
Food Authority's eligibility criteria shall be a part of the policy
statement required under Sec. 245.10 and shall be publicly announced in
accordance with the provisions of Sec. 245.5.
(c) Each School Food Authority shall serve free and reduced price
meals or free milk in the respective programs to children eligible under
its eligibility criteria. When a child is not a member of a family as
defined in Sec. 245.2(b), the child shall be considered a family of
one. In any school which participates in more than one of the child
nutrition programs, eligibility shall be applied uniformly so that
eligible children receive the same benefits in each program. If a child
transfers from one school to another school under the jurisdiction of
the same School Food Authority, his eligibility for free or reduced
price meals or for free milk, if previously established, shall be
transferred to, and honored by, the receiving school if it participates
in the National School Lunch Program, School Breakfast Program, Special
Milk Program and the School Food Authority has elected to provide free
milk, or is a commodity-only school.
(Sec. 8, Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1758); sec. 5, Pub. L.
95-627, 92 Stat. 3619 (42 U.S.C. 1772); 42 U.S.C. 1785, 1766, 1772,
1773(e), sec. 203, Pub. L. 96-499, 94 Stat. 2599; secs. 807 and 808,
Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1772, 1784, 1760; sec. 803,
Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758))
[Amdt. 8, 40 FR 57207, Dec. 8, 1975; 40 FR 58281, Dec. 16, 1975, as
amended by Amdt. 10, 41 FR 28783, July 13, 1976; Amdt. 13, 44 FR 33049,
June 8, 1979; 47 FR 31852, July 23, 1982]
Sec. 245.4 Exceptions for Puerto Rico and the Virgin Islands.
Because the State agencies of Puerto Rico and the Virgin Islands
provide free meals or milk to all children in schools under their
jurisdiction, regardless of the economic need of the child's family,
they are not required to make individual eligibility determinations or
publicly announce eligibility criteria. Instead, such State agencies may
use a statistical survey to determine the number of children eligible
for free or reduced price meals and milk on which a percentage factor
for the withdrawal of special cash assistance funds will be developed
subject to the following conditions:
(a) State agencies shall conduct a statistical survey once every
three years in accordance with the standards provided by FNS;
(b) State agencies shall submit the survey design to FNS for
approval before proceeding with the survey;
(c) State agencies shall conduct the survey and develop the factor
for withdrawal between July 1 and December 31 of the first school year
of the three-year period;
(d) State agencies shall submit the results of the survey and the
factor for fund withdrawal to FNS for approval before any reimbursement
may be received under that factor;
(e) State agencies shall keep all material relating to the conduct
of the survey and determination of the factor for fund withdrawal in
accordance with the record retention requirements in Sec. 210.8(e)(14)
of this chapter;
(f) Until the results of the triennial statistical survey are
available, the factor for fund withdrawal will be based on the most
recently established percentages. The Department shall make retroactive
adjustments to the States' Letter of Credit, if appropriate, for the
year of the survey;
(g) If any school in these States wishes to charge a student for
meals, the State agency, School Food Authority and school shall comply
with all the applicable provisions of this part and parts 210, 215 and
220 of this chapter.
(Sec. 9, Pub. L. 95-166, 91 Stat 1336 (42 U.S.C. 1759a); secs. 807 and
808, Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1772, 1784, 1760; 44
U.S.C. 3506)
[Amdt. 18, 45 FR 52771, Aug. 8, 1980, as amended at 46 FR 51366, Oct.
20, 1981; 47 FR 746, Jan. 7, 1982]
[[Page 288]]
Sec. 245.5 Public announcement of the eligibility criteria.
(a) After the State agency, or FNSRO where applicable, notifies the
school food authority that its criteria for determining the eligibility
of children for free and reduced price meals and for free milk have been
approved, the school food authority shall publicly announce such
criteria: Provided however, that no such public announcement shall be
required for boarding schools, residential child care institutions (see
Sec. 210.2 of this chapter, definition of Schools), or a school which
includes food service fees in its tuition, where all attending children
are provided the same meals or milk. Such announcements shall be made at
the beginning of each school year or, if notice of approval is given
thereafter, within 10 days after the notice is received. The public
announcement of such criteria, as a minimum, shall include the
following:
(1) Except as provided in Sec. 245.6(b), a letter or notice and
application distributed on or about the beginning of each school year,
to the parents of all children in attendance at school. The letter or
notice shall contain the following information:
(i) In schools participating in a meal service program, the
eligibility criteria for reduced price benefits with an explanation that
households with incomes less than or equal to the reduced price criteria
would be eligible for either free or reduced price meals, or in schools
participating in the free milk option, the eligibility criteria for free
milk benefits;
(ii) How a household may make application for free or reduced price
meals or for free milk for its children;
(iii) An explanation that an application for free or reduced price
benefits cannot be approved unless it contains complete
``documentation'' as defined in Sec. 245.2(a-4)(1)(i);
(iv) An explanation that households with children who are members of
currently certified food stamp, FDPIR or TANF households may submit
applications for these children with the abbreviated information
described in Sec. 245.2(a-4)(1)(ii);
(v) An explanation that the information on the application may be
verified at any time during the school year;
(vi) An explanation that households receiving free or reduced price
benefits must notify school officials during the school year of any
decreases in household size and any increases in income of over $50 per
month or $600 per year (or a lesser amount if established by the State)
or, in the case of households that provided a food stamp or TANF case
number or a FDPIR case number or other FDPIR identifier to establish
eligibility for free meals or free milk for a child, of any termination
of benefits for such children under the Food Stamp, FDPIR or TANF
Programs.
(vii) How a household may apply for benefits at any time during the
school year as circumstances change;
(viii) A statement to the effect that children having parents or
guardians who become unemployed are eligible for free or reduced price
meals or for free milk during the period of unemployment, Provided, that
the loss of income causes the household income during the period of
unemployment to be within the eligibility criteria;
(ix) A statement to the effect that in certain cases foster children
are eligible for free or reduced price meals or free milk regardless of
the income of the household with whom they reside and that households
wishing to apply for such benefits for foster children should contact
the School Food Authority;
(x) The statement: ``In the operation of child feeding programs, no
child will be discriminated against because of race, sex, color,
national origin, age or disability;'' and
(xi) How a household may appeal the decision of the School Food
Authority with respect to the application under the hearing procedure
set forth in Sec. 245.7. The letter or notice shall be accompanied by a
copy of the application form required under Sec. 245.6.
(2) On or about the beginning of each school year, a public release,
containing the same information supplied to parents, and including both
free and reduced price eligibility criteria shall be provided to the
informational media, the local unemployment office,
[[Page 289]]
and to any major employers contemplating large layoffs in the area from
which the school draws its attendance.
(b) Copies of the public release shall be made available upon
request to any interested persons. Any subsequent changes in a school's
eligibility criteria during the school year shall be publicly announced
in the same manner as the original criteria were announced.
(Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758); Pub. L. 79-
396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80 Stat. 885-880 (42
U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C. 1759))
[Amdt. 8, 40 FR 57207, Dec. 8, 1975, as amended by Amdt. 10, 41 FR
28783, July 13, 1976; 47 FR 31852, 31853, July 23, 1982; Amdt. 24, 48 FR
19355, Apr. 29, 1983; 49 FR 26034, June 26, 1984; 52 FR 19275, May 22,
1987; 64 FR 50744, Sept. 20, 1999; 64 FR 72472, Dec. 28, 1999; 66 FR
48328, Sept. 20, 2001; 68 FR 53489, Sept. 11, 2003]
Sec. 245.6 Certification of children for free and reduced price meals
and free milk.
(a) Each School Food Authority of a school participating in the
National School Lunch Program, School Breakfast Program or Special Milk
Program or of a commodity only school shall provide supplies of a form
for use by families in making application for free or reduced price
meals or free milk for their children. The application shall be clear
and simple in design and the information requested thereon shall be
limited to that required to demonstrate that the family does, or does
not, meet the eligibility criteria for free or reduced price meals,
respectively, or for free milk, issued by the School Food Authority. The
information requested on the application with respect to the current
income of the household shall be limited to the income received by each
member identified by the household member who received the income, and
the source of the income (such as earnings, wages, welfare, pensions,
support payments, unemployment compensation, social security and other
cash income). Other cash income includes cash amounts received or
withdrawn from any source, including savings, investments, trust
accounts, and other resources which are available for payment of the
price of a child's meals or milk. Additionally, the application shall
require applicants to provide the names of all household members and the
social security number of the adult household member who signs the
application. In lieu of a social security number, the household may
indicate the adult household member who signs the application does not
possess a social security number. However, if application is being made
for a child who is a member of a food stamp, FDPIR or TANF household,
the application shall enable the household to provide the appropriate
food stamp or TANF case number or FDPIR case number or other FDPIR
identifier in lieu of names of all household members, household income
information and social security number. The application shall also
contain substantially the following statements:
(1) ``Unless you include your child's case number for the Food Stamp
Program, the Food Distribution Program on Indian Reservations (or other
identifier for the Food Distribution Program on Indian Reservations) or
the Temporary Assistance for Needy Families Program, you must include
the social security number of the adult household member signing the
application or indicate that the household member does not have a social
security number. This is required by section 9 of the National School
Lunch Act. The social security number is not mandatory, but the
application cannot be approved if a social security number is not given
or an indication is not made that the signer does not have a social
security number. The social security number will be used in the
administration and enforcement of the program.'' State agencies and
school food authorities must ensure that the notice complies with
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note); and
(2) ``In certain cases foster children are eligible for free or
reduced price meals or free milk regardless of your household income. If
you have such children living with you and wish to apply for such meals
or milk for them, please contact us.'' The application shall also
include a statement, immediately above the space for signature, that the
person signing the application certifies that all information furnished
in the application is true and correct,
[[Page 290]]
that the application is being made in connection with the receipt of
Federal funds, that school officials may verify the information on the
application, and that deliberate misrepresentation of the information
may subject the applicant to prosecution under applicable State and
Federal criminal statutes. The application shall be signed by an adult
member of the family. The application shall contain clear instructions
with respect to the submission of the completed application to the
official or officials designated by the School Food Authority to make
eligibility determinations on its behalf. A family shall be permitted to
file an application at any time during the school year.
(b) Direct certification. In lieu of determining eligibility based
on information provided by the household on the free and reduced price
meal or milk application specified in paragraph (a) of this section,
school food authorities may determine children eligible for free meals
or milk based on documentation obtained from the appropriate State or
local agency responsible for the administration of the Food Stamp
Program, FDPIR and/or the TANF Program, hereafter referred to as direct
certification. The documentation for direct certification shall include
the information specified in Sec. 245.2(a-4)(2). The food stamp, FDPIR
or TANF office may provide school officials with a list which includes
all required documentation, or documentation may be obtained through a
computerized match in which computerized lists of names of children from
food stamp, FDPIR or TANF households and other identifying information
are matched against a list of names and other identifying information of
schoolchildren. When computer matches are used or the signature of the
food stamp, FDPIR or TANF official is otherwise impracticable to obtain,
the signature of the food stamp, FDPIR or TANF official is not required.
However, other arrangements must be made to ensure that a responsible
official can attest to the data. Additionally, the food stamp, FDPIR
and/or TANF office may provide food stamp, FDPIR and/or TANF households
with individual notices which contain all required documentation. The
household may then transmit the notice to the school.
(1) Information about the child or the household obtained directly
from the food stamp, FDPIR or TANF office must be kept confidential and
shall be used solely for the purpose of determining the child's
eligibility for school meal or milk benefits, or as otherwise permitted
by section 9 of the National School Lunch Act.
(2) School food authorities are not required to provide the letter
specified in Sec. 245.5(a) to the parents of children who are eligible
for free meals under paragraph (b) of this section when the school food
authorities distribute the letters or notices with application forms and
the notice to households concerning eligibility for benefits under
direct certification, specified in paragraph (c)(1) of this section,
through the mail, individualized student packets, or other method which
prevents the overt identification of children eligible for direct
certification.
(c) Determination of eligibility. Prior to the processing of
applications or the completion of direct certification procedures for
the current school year, children from households with approved
applications or documentation of direct certification on file from the
preceding year may be served reimbursable free and reduced price meals
or free milk. However, applications and documentation of direct
certification from the preceding year may be used to determine
eligibility only during the 30 operating days following the first
operating day at the beginning of the school year, or during a timeframe
established by the State agency, provided that any State agency
timeframe does not exceed the 30 operating day limit. The school food
authority must take the income information provided by the household on
the application and calculate the household's total current income. When
a household submits an application containing complete documentation, as
specified in Sec. 245.2(a-4)(1)(i), and the household's total current
income is at or below the eligibility limits specified in the Income
Eligibility Guidelines, the children in that household must be approved
for
[[Page 291]]
free or reduced price benefits, as applicable. When a household submits
an application containing the required food stamp, FDPIR or TANF
documentation, as specified in Sec. 245.2(a-4)(1)(ii), the children in
that household must be approved for free benefits. Additionally, when
the school food authority obtains documentation from the State or local
agency responsible for the administration of the Food Stamp Program,
FDPIR and/or TANF Program that children are members of currently
certified food stamp, FDPIR or TANF households, as specified in Sec.
245.2(a-4)(2), the school food authority must approve such children for
free benefits without applications from the households.
(1) Notice of approval. The school food authority must promptly
notify the household of their children's eligibility and provide them
the benefits to which they are entitled. Households approved for
benefits based on documentation provided by the appropriate State or
local agency responsible for the administration of the Food Stamp
Program, FDPIR or TANF Program must be notified, in writing, that their
children are eligible for free meals or free milk, that households must
contact the school when their children are no longer eligible for food
stamp, FDPIR or TANF benefits, and that no application for free and
reduced price school meals is required at this time. The notice of
eligibility must also inform households that they must notify the school
if they do not want their children to receive free benefits. When the
household transmits the notice of eligibility containing the above
information and the documentation provided by the food stamp, FDPIR or
TANF office to the school, the school food authority is not required to
provide a separate notice of eligibility. Children from households that
notify the school that they do not want free benefits must have their
benefits discontinued as soon as possible. Any notification from the
household declining benefits must be documented and maintained on file,
in accordance with paragraph (e) of this section. Additionally, a school
food authority that is notified by the household that they are no longer
eligible to receive food stamp, FDPIR or TANF benefits must follow the
procedures specified in Sec. 245.6a(e), and inform the household that
it must submit an application with income information to establish
continued eligibility.
(2) Notice of denial. When the application furnished by the family
is not fully documented or does not meet the eligibility criteria for
free or reduced price benefits, school officials shall promptly provide
written notice to each family denied benefits. As a minimum, this notice
shall include:
(i) The reason for the denial of benefits, e.g. income in excess of
allowable limits or incomplete application; (ii) notification of the
right to appeal; (iii) instructions on how to appeal; and (iv) a
statement reminding parents that they may reapply for free and reduced
price benefits at any time during the school year. The reasons for
ineligibility shall be properly documented and retained on file at the
School Food Authority.
(3) Appeals of denied benefits. A family who wishes to appeal a
denied application by the School Food Authority may do so as specified
in Sec. 245.7. However, prior to initiating the hearing procedure, the
parent may request a conference to provide the opportunity for the
parent and school officials to discuss the situation, present
information, and obtain an explanation of the data submitted in the
application or the decision rendered. The request for a conference shall
not in any way prejudice or diminish the right to a fair hearing. The
School Food Authority shall promptly schedule a fair hearing, if
requested.
(d) After the letter to parents and the applications have been
disseminated, the School Food Authority may determine, based on
information available to it, that a child for whom an application has
not been submitted meets the School Food Authority's eligibility
criteria for free and reduced price meals or for free milk. In such a
situation, the School Food Authority shall complete and file an
application for such child setting forth the basis of determining the
child's eligibility. When a School Food Authority has obtained a
determination of individual family income and family-size data from
other
[[Page 292]]
sources, it need not require the submission of an application for any
child from a family whose income would qualify for free or reduced price
meals or for free milk under the School Food Authority's established
criteria. In such event, the School Food Authority shall notify the
family that its children are eligible for free or reduced price meals or
for free milk. Nothing in this paragraph shall be deemed to provide
authority for the School Food Authority to make eligibility
determinations or certifications by categories or groups of children.
(e) The school food authority must maintain documentation
substantiating eligibility determinations on file for 3 years after the
date of the fiscal year to which they pertain, except that if audit
findings have not been resolved, the documentation must be maintained as
long as required for resolution of the issues raised by the audit.
(f) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP)
Program eligibility information about children eligible for free and
reduced price meals may be disclosed to Medicaid and SCHIP as described
in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow school
food authorities to disclose children's free and reduced price meal
eligibility information to Medicaid and SCHIP. School food authorities
may then elect to do so. Children's program eligibility information may
only be disclosed to Medicaid or SCHIP when both the State agency and
the school food authority so elect, the parent/guardian does not decline
to have their eligibility information disclosed as described in
paragraph (f)(5), and the requirements in this paragraph (f) are met.
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or school food authority, as appropriate, may disclose
children's names, eligibility status (whether they are eligible for free
or reduced price meals or free milk), and any other eligibility
information obtained through the free and reduced price meal/milk
application or obtained through direct certification to persons directly
connected with the administration of Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration of
Medicaid and SCHIP for purposes of disclosure of children's free and
reduced price meal and free milk eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free and reduced price meal and free milk eligibility
information? Medicaid and SCHIP agencies and health insurance program
operators receiving children's free and reduced price meal and free milk
eligibility information may only use the information to seek to enroll
children in Medicaid or SCHIP. The Medicaid and SCHIP enrollment process
may include targeting and identifying children from low-income
households who are potentially eligible for Medicaid or SCHIP for the
purpose of seeking to enroll them in Medicaid or SCHIP.
(5) Must we notify households of potential disclosure to Medicaid or
SCHIP? The State agency or school food authority, as appropriate, must
notify parents/guardians that their children's free or reduced price
meal or free milk eligibility information will be disclosed to Medicaid
and/or SCHIP unless the parent/guardian elects not to have their
information disclosed. Additionally, the State agency or school food
authority, as appropriate, must give parents/guardians an opportunity to
elect not to have their information disclosed to Medicaid or SCHIP. Only
the parent or guardian who is a member of the household or family for
purposes of the free and reduced price meal or free milk application may
decline the disclosure of eligibility information. The notification must
inform parents/guardians that they are not required to consent to the
disclosure, that the information, if disclosed, will be used to identify
children eligible for and seek
[[Page 293]]
to enroll children in a health insurance program, and that their
decision will not affect their children's eligibility for free or
reduced price meals or free milk. The notification may be included in
the letter/notice to parents/guardians that accompanies the free and
reduced price meal or free milk application, on the application itself
or in a separate notice provided to parents/guardians. The notice must
give parents/guardians adequate time to respond. For children determined
eligible through direct certification, the notice of potential
disclosure may be included in the document informing parents/guardians
of their children's eligibility for free meals or free milk through
direct certification.
(6) May social security numbers be disclosed? The State agency or
school food authority, as appropriate, may disclose social security
numbers to any programs or persons authorized to receive all program
eligibility information under this paragraph (f), provided parents/
guardians have not declined to have their information disclosed.
However, State agencies and school food authorities that plan to
disclose social security numbers must give notice of the planned use of
the social security numbers. This notice must be in accordance with
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note). The
application must include substantially the following language for
disclosures of social security numbers to Medicaid or SCHIP: ``The
social security number may also be disclosed to Medicaid and the State
Children's Health Insurance Program for the purpose of identifying and
seeking to enroll eligible children in one of these health insurance
programs.'' This language is in addition to the notice required in
paragraph (a)(1) of this section. State agencies and school food
authorities are responsible for drafting the appropriate notice for
disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or school food authority, as appropriate,
must have a written agreement with the State or local agency or agencies
administering Medicaid or SCHIP prior to disclosing children's free and
reduced price eligibility information. At a minimum, the agreement must:
(i) Identify the health insurance program or health agency receiving
children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or school food authority, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (f) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of children's
free and reduced price meal eligibility information to Medicaid or
SCHIP, as provided in this paragraph (f), must ensure that any school
food authority acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free and reduced price meal eligibility information to seek to enroll
children in those health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used
[[Page 294]]
only to seek to enroll children in Medicaid or SCHIP and provides each
parent/guardian with an opportunity to elect not to have the information
disclosed.
(Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758))
[35 FR 14065, Sept. 4, 1970, as amended at 38 FR 14957, June 7, 1973;
Amdt. 6, 39 FR 30338, Aug. 22, 1974; Amdt. 9, 41 FR 26192, June 25,
1976; Amdt. 19, 45 FR 67287, Oct. 10, 1980; 47 FR 31853, July 23, 1982;
49 FR 26034, June 26, 1984; 52 FR 19275, May 22, 1987; 55 FR 19240, May
9, 1990; 56 FR 32950, July 17, 1991; 56 FR 33860, July 24, 1991; 64 FR
72472, Dec. 28, 1999; 66 FR 2205, Jan. 11, 2001; 66 FR 48328, Sept. 20,
2001; 68 FR 53489, Sept. 11, 2003]
Sec. 245.6a Verification requirements.
(a) Verification requirement. School officials may seek verification
of the information on the application. State agencies shall ensure that
by December 15 of each School Year, School Food Authorities have
selected and verified a sample of their approved free and reduced price
applications in accordance with the conditions and procedures described
in this section. Verification activity may begin at the start of the
school year but the final required sample size shall be based on the
number of approved applications on file as of October 31. Any extensions
to these deadlines must be approved in writing by FNS. School Food
Authorities are required to satisfy the verification requirement by
using either random sampling or focused sampling as described below.
Random sampling consists of verifying a minimum of the lesser of 3
percent or 3,000 applications which are selected by the School Food
Authority. Focused sampling consists of selecting and verifying a
minimum of: the lesser of 1 percent or 1,000 of total applications
selected from non-food stamp households claiming monthly income within
$100 or yearly income within $1200 of the income eligibility limit for
free or reduced price meals; plus the lesser of one half of 1 percent
(.5%) or 500 applications of food stamp, FDPIR or TANF households that
provided a food stamp or TANF case number or FDPIR case number or other
FDPIR identifier in lieu of income information. A State may require all
School Food Authorities to perform either random or focused sampling.
School Food Authorities may choose to verify up to 100 percent of all
applications to improve program integrity. Any State may, with the
written approval of FNS, assume responsibility for complying with the
verification requirements of this part within any of its School Food
Authorities. When assuming such responsibility, States may utilize
alternate approaches to verification provided that such verification
meets the requirements of this part.
(1) Confirmation of income information. Verification efforts shall
not delay the approval of applications. An application must be approved
if it contains the essential information specified in Sec. 245.2(a-4)
and, if applicable, the household meets the income eligibility criteria
for free or reduced price benefits. When written evidence or collateral
contacts are the primary sources of information, the School Food
Authority shall require the submission of income information for the
most recent full month that is available. However, when using a system
of records, the School Food Authority may choose a recent month to
verify and the entire sample may be verified for the same month.
Households which dispute the validity of income information acquired
through systems of records shall be given the opportunity to produce
more recent income information.
(2) Notification of selection. Households selected to provide
verification shall be provided written notice that their applications
have been selected for verification and that they are required, by such
date as determined by the school food authority, to submit the requested
verification information to confirm eligibility for free or reduced
price meals. These households shall be advised of the type or types of
information and/or documents acceptable to the school. This information
must include a social security number for each adult household member or
an indication that such member does not have one. School food
authorities shall inform selected households that:
(i) Section 9 of the National School Lunch Act requires that unless
the child's food stamp case number/ FDPIR case number or other FDPIR
identifier or TANF case number is provided,
[[Page 295]]
households selected for verification must provide the social security
number of each adult household member;
(ii) In lieu of providing a social security number, an adult
household member may indicate that he/she does not possess one;
(iii) Provision of a social security number is not mandatory but if
a social security number is not provided for each adult household member
or an indication is not made that he/she does not possess one, benefits
will be terminated;
(iv) The social security numbers may be used to identify household
members in carrying out efforts to verify the correctness of information
stated on the application and continued eligibility for the program.
These verification efforts may be carried out through program reviews,
audits, and investigations and may include contacting a food stamp,
FDPIR or TANF office to determine current certification for receipt of
these benefits, contacting the State employment security office to
determine the amount of benefits received and checking documentation
produced by household members to prove the amount of income received.
These verification efforts may be carried out through program reviews,
audits, and investigations and may include contacting employers to
determine income, contacting a food stamp or welfare office to determine
current certification for receipt of food stamps or AFDC benefits,
contacting the State employment security office to determine the amount
of benefits received and checking the documentation produced by
household members to prove the amount of income received.
(v) This information must be provided to the attention of each adult
household member disclosing his/her social security number. State
agencies and school food authorities shall ensure that the notice
complies with section 7 of Pub. L. 93-579 (Privacy Act of 1974). These
households shall be provided with the name and phone number of a school
official who can assist in the verification effort. Selected households
must also be informed that, in lieu of any information that would
otherwise be required, they can submit proof of current food stamp,
FDPIR or TANF certification as described in paragraph (a)(3) of this
section to verify the free meal eligibility of a child who is a member
of a food stamp, FDPIR or TANF household. All households selected for
verification shall be advised that failure to cooperate with
verification efforts will result in the termination of benefits.
(3) Food stamp, FDPIR or TANF recipients. On applications where
households have furnished food stamp or TANF case numbers or FDPIR case
numbers or other FDPIR identifiers, verification shall be accomplished
either by confirming with the local food stamp, FDPIR, or TANF office
that each child, for whom application was made and a case number or
other identifier was provided, is a member of a currently certified food
stamp, FDPIR or TANF household; or by obtaining from the household a
copy of a current ``Notice of Eligibility'' for the Food Stamp Program,
FDPIR or TANF Program or equivalent official documentation issued by the
food stamp, FDPIR or TANF office which confirms that the child is a
member of a currently certified food stamp, FDPIR or TANF household. An
identification card for either program is not acceptable as verification
unless it contains an expiration date. If it is not established that the
child is a member of a currently certified food stamp, TANF or FDPIR
household, the procedures for adverse action specified in paragraph (e)
of this section must be followed. The notification of forthcoming
termination of benefits provided to such households shall include a
request for household income information and for written evidence which
confirms household income to assist those households in establishing
continued eligibility for free meal benefits.
(4) Household cooperation. If a household refuses to cooperate with
efforts to verify, eligibility for free or reduced price benefits shall
be terminated in accordance with Sec. 245.6a(e). Households which
refuse to complete the verification process and which are consequently
determined ineligible for such benefits shall be counted toward meeting
the School Food Authority's required sample of verified households.
[[Page 296]]
(5) Exceptions from verification. Verification efforts are not
required in residential child care institutions; schools in which FNS
has approved special cash assistance claims based on economic statistics
regarding per capita income; or schools in which all children are served
with no separate charge for food service and no special cash assistance
is claimed. School Food Authorities in which all schools participate in
the Special Assistance Certification and Reimbursement Alternatives
specified in Sec. 245.9 shall meet the verification requirement only in
those years in which applications are taken for all children in
attendance. Verification of eligibility is not required of households
when the determination of eligibility was based on documentation
provided by the State or local agency responsible for the administration
of the Food Stamp Program, FDPIR or TANF Program, as described in Sec.
245.6(b).
(b) Sources of information. Sources of information for verification
may include written evidence, collateral contacts, and systems of
records.
(1) Written evidence. Written evidence shall be used as the primary
source of information for verification. Written evidence includes
written confirmation of a household's circumstances, such as wage stubs,
award letters, and letters from employers. Whenever written evidence is
insufficient to confirm income information on the application or current
eligibility, the school may require collateral contacts.
(2) Collateral contact. Collateral contact is a verbal confirmation
of a household's circumstances by a person outside of the household. The
collateral contact may be made by person or by phone. The verifying
official may select a collateral contact if the household fails to
designate one or designates one which is unacceptable to the verifying
official. If the verifying official designates a collateral contact, the
contact shall not be made without providing written or oral notice to
the household. At the time of this notice, the household shall be
informed that it may consent to the contact or provide acceptable
verification in another form. If the household refuses to choose one of
these options, its eligibility shall be terminated in accordance with
the normal procedures for failure to cooperate with verification
efforts. Collateral contacts could include employers, social service
agencies, and migrant agencies.
(3) Agency records. Agency records to which the State agency or
School Food Authority may have access are not considered collateral
contacts. Information concerning income, household size, or food stamp,
FDPIR, or TANF eligibility maintained by other government agencies to
which the State agency, school food authority or school can legally gain
access may be used to confirm a household's income, size, or receipt of
benefits. One possible source could be wage and benefit information
maintained by the State employment agency, if that information is
available. The use of any information derived from other agencies must
be used with the applicable safeguards concerning disclosure.
(c) Verification reporting and recordkeeping requirements. No later
than March 1, 2005 and by March 1st each year thereafter, each school
food authority must report information related to its annual
verification activity to the State agency in accordance with guidelines
provided by FNS. These required data elements will be specified by FNS.
Contingent upon new funding to support this purpose, FNS will also
require each school food authority to collect and report the number of
students who were terminated as a result of verification but who were
reinstated as of February 15th. The first report containing this data
element would be required in the school year beginning July 1, 2005 and
each school year thereafter. State agencies may develop paper or
electronic reporting forms to collect this data from school food
authorities, as long as all required data elements are collected from
each school food authority. School food authorities shall retain copies
of the information reported under this section and all supporting
documents for a minimum of 3 years. All verified applications must be
readily retrievable on an individual school basis and include
[[Page 297]]
all documents submitted by the household for the purpose of confirming
eligibility, reproductions of those documents, or annotations made by
the determining official which indicate which documents were submitted
by the household and the date of submission. All relevant correspondence
between the households selected for verification and the school or
school food authority must be retained. School food authorities are
encouraged to collect and report any or all verification data elements
before the required dates.
(d) Nondiscrimination. The verification efforts shall be applied
without regard to race, sex, color, national origin, age, or disability.
(e) Adverse action. If verification activities fail to confirm
eligibility for free or reduced price benefits or should the household
fail to cooperate with verification efforts, the school or School Food
Authority shall reduce or terminate benefits, as applicable, as follows:
Ten days advance notification shall be provided to households that are
to receive a reduction or termination of benefits, prior to the actual
reduction or termination. The first day of the 10 day advance notice
period shall be the day the notice is sent. The notice shall advise the
household of:
(1) The change; (2) the reasons for the change; (3) notification of
the right to appeal and when the appeal must be filed to ensure
continued benefits while awaiting a hearing and decision; (4)
instructions on how to appeal; and (5) the right to reapply at any time
during the school year. The reasons for ineligibility shall be properly
documented and retained on file at the School Food Authority.
(Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758))
[48 FR 12510, Mar. 25, 1983, as amended at 49 FR 26034, June 26, 1984;
52 FR 19275, May 22, 1987; 55 FR 19240, May 9, 1990; 56 FR 32950, July
17, 1991; 56 FR 33861, July 24, 1991; 64 FR 50744, Sept. 20, 1999; 64 FR
72474, Dec. 28, 1999; 66 FR 48328, Sept. 20, 2001; 68 FR 53489, Sept.
11, 2003]
Sec. 245.7 Hearing procedure for families and School Food Authorities.
(a) Each School Food Authority of a school participating in the
National School Lunch Program, School Breakfast Program or the Special
Milk Program or of a commodity only school shall establish a hearing
procedure under which:
(1) A family can appeal from a decision made by the School Food
Authority with respect to an application the family has made for free or
reduced price meals or for free milk, and (2) the School Food Authority
can challenge the continued eligibility of any child for a free or
reduced price meal or for free milk. The hearing procedure shall provide
for both the family and the School Food Authority:
(i) A simple, publicly announced method to make an oral or written
request for a hearing;
(ii) An opportunity to be assisted or represented by an attorney or
other person;
(iii) An opportunity to examine, prior to and during the hearing,
any documents and records presented to support the decision under
appeal;
(iv) That the hearing shall be held with reasonable promptness and
convenience, and that adequate notice shall be given as to the time and
place of the hearing;
(v) An opportunity to present oral or documentary evidence and
arguments supporting a position without undue interference;
(vi) An opportunity to question or refute any testimony or other
evidence and to confront and cross-examine any adverse witnesses;
(vii) That the hearing shall be conducted and the decision made by a
hearing official who did not participate in making the decision under
appeal or in any previously held conference;
(viii) That the decision of the hearing official shall be based on
the oral and documentary evidence presented at the hearing and made a
part of the hearing record;
(ix) That the parties concerned and any designated representative
shall be notified in writing of the decision of the hearing official;
(x) That a written record shall be prepared with respect to each
hearing, which shall include the challenge or the decision under appeal,
any documentary evidence and a summary of any oral testimony presented
at the
[[Page 298]]
hearing, the decision of the hearing official, including the reasons
therefor, and a copy of the notification to the parties concerned of the
decision of the hearing official; and
(xi) That the written record of each hearing shall be preserved for
a period of 3 years and shall be available for examination by the
parties concerned or their representatives at any reasonable time and
place during that period.
(b) Continuation of benefits. When a household disagrees with an
adverse action which affects its benefits and requests a fair hearing,
benefits shall be continued as follows while the household awaits the
hearing and decision:
(1) Households that have been approved for benefits and that are
subject to a reduction or termination of benefits later in the same
school year shall receive continued benefits if they appeal the adverse
action within the 10 day advance notice period; and
(2) Households that are denied benefits upon application shall not
receive benefits.
(44 U.S.C. 3506; sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C.
1758))
[Amdt. 6, 39 FR 30339, Aug. 22, 1974, as amended at 47 FR 746, Jan. 7,
1982; 48 FR 12511, Mar. 25, 1983]
Sec. 245.8 Nondiscrimination practices for children eligible to
receive free and reduced price meals and free milk.
School Food Authorities of schools participating in the National
School Lunch Program, School Breakfast Program or Special Milk Program
or of commodity only schools shall take all actions that are necessary
to insure compliance with the following nondiscrimination practices for
children eligible to receive free and reduced price meals or free milk:
(a) The names of the children shall not be published, posted or
announced in any manner;
(b) There shall be no overt identification of any of the children by
the use of special tokens or tickets or by any other means;
(c) The children shall not be required to work for their meals or
milk;
(d) The children shall not be required to use a separate dining
area, go through a separate serving line, enter the dining area through
a separate entrance or consume their meals or milk at a different time;
(e) When more than one lunch or breakfast or type of milk is offered
which meets the requirements prescribed in Sec. 210.10, Sec. 210.15a,
Sec. 220.8 or Sec. 215.2(1) of this chapter, the children shall have
the same choice of meals or milk that is available to those children who
pay the full price for their meal or milk.
[Amdt. 6, 39 FR 30339, Aug. 22, 1974]
Sec. 245.9 Special assistance certification and reimbursement
alternatives.
(a) Provision 1. A School Food Authority of a school having at least
80 percent of its enrolled children determined eligible for free or
reduced price meals may, at its option, authorize the school to reduce
annual certification and public notification for those children eligible
for free meals to once every two consecutive school years. This
alternative shall be known as provision 1 and the following requirements
shall apply:
(1) A School Food Authority of a school operating under provision 1
requirements shall publicly notify in accordance with Sec. 245.5,
parents of enrolled children who are receiving free meals once every two
consecutive school years, and shall publicly notify in accordance with
Sec. 245.5, parents of all other enrolled children on an annual basis.
(2) The 80 percent enrollment eligibility for this alternative shall
be based on the school's March enrollment data of the previous school
year, or on other comparable data.
(3) A School Food Authority of a school operating under provision 1,
shall count the number of free, reduced price and paid meals served to
children in that school as the basis for monthly reimbursement claims.
(b) Provision 2. A school food authority may certify children for
free and reduced price meals for up to 4 consecutive school years in the
schools which serve meals at no charge to all enrolled children;
provided that public notification and eligibility determinations are in
accordance with Sec. 245.5 and Sec. 245.3, respectively, during the
base year as defined in paragraph (b)(6) of this section.
[[Page 299]]
The Provision 2 base year is the first year, and is included in the 4-
year cycle. The following requirements apply:
(1) Meals at no charge. Participating schools must serve
reimbursable meals, as determined by a point of service observation, or
as otherwise approved under part 210 of this chapter, to all
participating children at no charge.
(2) Cost differential. The school food authority of a school
participating in Provision 2 must pay, with funds from non-Federal
sources, the difference between the cost of serving lunches and/or
breakfasts at no charge to all participating children and Federal
reimbursement.
(3) Meal counts. During the base year, even though meals are served
to participating students at no charge, schools must take daily meal
counts of reimbursable student meals by type (free, reduced price, and
paid) at the point of service, or as otherwise approved under part 210
of this chapter. During the non-base years, participating Provision 2
schools must take total daily meal counts (not by type) of reimbursable
student meals at the point of service, or as otherwise approved under
part 210 of this chapter. For the purpose of calculating reimbursement
claims in the non-base years, school food authorities must establish
school specific monthly or annual claiming percentages, as follows:
(i) Monthly percentages. In any given Provision 2 school, the
monthly meal counts of the actual number of meals served by type (free,
reduced price, and paid) during the base year must be converted to
monthly percentages for each meal type. For example, the free lunch
percentage is derived by dividing the monthly total number of
reimbursable free lunches served by the total number of reimbursable
lunches served in the same month (free, reduced price and paid). The
percentages for the reduced price and paid lunches are calculated using
the same method as the above example for free lunches. These three
percentages, calculated at the end of each month of the first school
year, are multiplied by the corresponding monthly lunch count total of
all reimbursable lunches served in the second, third and fourth
consecutive school years, and applicable extensions, in order to
calculate reimbursement claims for free, reduced price and paid lunches
each month. The free, reduced price and paid percentages for breakfasts
and, as applicable, snacks, are calculated using the same method; or
(ii) Annual percentages. In any given Provision 2 school, the actual
number of all reimbursable meals served by type (free, reduced price,
and paid) during the base year must be converted to an annual percentage
for each meal type. For example, the free lunch percentage is derived by
dividing the annual total number of reimbursable free lunches served by
the annual total number of reimbursable lunches served for all meal
types (free, reduced price and paid). The percentages for the reduced
price and paid lunches are calculated using the same method as the above
example for free lunches. These three percentages, calculated at the end
of the base year, are multiplied by the total monthly lunch count of all
reimbursable lunches served in each month of the second, third and
fourth consecutive school years, and applicable extensions, in order to
calculate reimbursement claims for free, reduced price and paid lunches
each month. The free, reduced price and paid percentages for breakfasts
and, as applicable, snacks, are calculated using the same method for
each type of meal service.
(4) School food authority claims review process. During the
Provision 2 base year (not including a streamlined base year under
paragraph (c)(2)(iii) of this section), school food authorities are
required to review the lunch count data for each school under its
jurisdiction to ensure the accuracy of the monthly Claim for
Reimbursement in accordance with Sec. 210.8(a)(2) of this chapter.
During non-base years and streamlined base years, school food
authorities must compare each Provision 2 school's total daily meal
counts to the school's total enrollment, adjusted by an attendance
factor. The school food authority must promptly follow-up as specified
in Sec. 210.8(a)(4) of this chapter when the claims review suggests the
likelihood of lunch count problems. When a school elects to operate
Provision 2 only in the School Breakfast
[[Page 300]]
Program, school food authorities must continue to comply with the claims
review requirements of Sec. 210.8(a)(2) of this chapter for the
National School Lunch Program.
(5) Verification. Except as otherwise specified in Sec.
245.6a(a)(5), school food authorities are required to conduct
verification in accordance with Sec. 245.6a. When a school elects to
participate under Provision 2 or for all of the meal programs in which
it participates (breakfast 7 CFR part 220 and/or lunch 7 CFR part 210),
the applications from that school are excluded from the school food
authority's required verification sample size and are exempt from
verification during non-base years.
(6) Base year. For purposes of this paragraph (b), the term base
year means the last school year for which eligibility determinations
were made and meal counts by type were taken or the school year in which
a school conducted a streamlined base year as authorized under paragraph
(c)(2)(iii) of this section. Schools shall offer reimbursable meals to
all students at no charge during the Provision 2 base year except as
otherwise specified in paragraph (b)(6)(ii) of this section.
(i) Duration of the base year. The base year must begin at the start
of the school year or as otherwise specified in paragraph (b)(6)(ii) of
this section.
(ii) Delayed implementation. At State agency discretion, schools may
delay implementation of Provision 2 for a period of time not to exceed
the first claiming period of the school year in which the base year is
established. Schools implementing this option may conduct standard meal
counting and claiming procedures, including charging students eligible
for reduced price and paid meals, during the first claiming period of
the school year. Such schools must submit claims reflecting the actual
number of meals served by type. In subsequent years, such schools shall
convert the actual number of reimbursable meals served by type (free,
reduced price and paid) during the remaining claiming periods of the
base year, in which meals were served at no charge to all participating
students, to an annual percentage for each type of meal. The annual
claiming percentages must be applied to the total number of reimbursable
meals served during the first claiming period in all non-base years of
operation for that cycle and any extensions.
(c) Extension of Provision 2. At the end of the initial cycle, and
each subsequent 4-year cycle, the State agency may allow a school to
continue under Provision 2 for another 4 years using the claiming
percentages calculated during the most recent base year if the school
food authority can establish, through available and approved
socioeconomic data, that the income level of the school's population, as
adjusted for inflation, has remained stable, declined or has had only
negligible improvement since the base year.
(1) Extension criteria. School food authorities must submit to the
State agency available and approved socioeconomic data to establish
whether the income level of a school's population, as adjusted for
inflation, remained constant with the income level of the most recent
base year.
(i) Available and approved sources of socioeconomic data. Pre-
approved sources of socioeconomic data which may be used by school food
authorities to establish the income level of the school's population
are: local data collected by the city or county zoning and economic
planning office; unemployment data; local Food Stamp Program
certification data including direct certification; Food Distribution
Program on Indian Reservations data; statistical sampling of the
school's population using the application or equivalent income
measurement process; and, Temporary Assistance for Needy Families data
(provided that the eligibility standards were the same or more
restrictive in the base year as the current year with allowance for
inflation). To grant an extension using pre-approved socioeconomic data
sources, State agencies must review and evaluate the socioeconomic data
submitted by the school food authority to ensure that it is reflective
of the school's population, provides equivalent data for both the base
year and the last year of the current cycle, and demonstrates that the
income level of the school's population, as adjusted for inflation, has
remained stable, declined or had
[[Page 301]]
only negligible improvement. If the school food authority wants to
establish the income level of the school's population using alternate
sources of socioeconomic data, the use of such data must be approved by
the Food and Nutrition Service. Data from alternate sources must be
reflective of the school's population, be equivalent data for both the
base year and the last year of the current cycle, and effectively
measure whether the income level of the school's population, as adjusted
for inflation, has remained stable, declined or had only negligible
improvement.
(ii) Negligible improvement. The change in the income level of the
school's population shall be considered negligible if there is a 5
percent or less improvement, after adjusting for inflation, over the
base year in the level of the socioeconomic indicator which is used to
establish the income level of the school's population.
(2) Extension not approved. The State agency shall not approve an
extension of Provision 2 procedures in those schools for which the
available and approved socioeconomic data does not reflect the school's
population, is not equivalent data for the base year and the last year
of the current cycle, or shows over 5 percent improvement, after
adjusting for inflation, in the income level of the school's population.
Such schools shall:
(i) Return to standard meal counting and claiming. Return to
standard meal counting and claiming procedures;
(ii) Establish a new base year. Establish a new Provision 2 base
year by taking new free and reduced price applications, making new free
and reduced price eligibility determinations, and taking point of
service counts of free, reduced price and paid meals for the first year
of the new cycle. For these schools, the new Provision 2 cycle will be 4
years. Schools electing to establish a Provision 2 base year shall
follow procedures contained in paragraph (b) of this section;
(iii) Establish a streamlined base year. With prior approval by the
State agency, establish a streamlined base year by providing
reimbursable meals to all participating students at no charge and
developing either enrollment based or participation based claiming
percentages.
(A) Enrollment based percentages. In accordance with guidance
established by the Food and Nutrition Service, establish a new Provision
2 base year by determining program eligibility on the basis of household
size and income, and direct certification if applicable, for a
statistically valid proportion of the school's enrollment as of October
31, or other date approved by the State agency. The statistically valid
measurement of the school's enrollment must be obtained during the first
year of the new cycle and meet the requirements of paragraph (k) of this
section. Using the data obtained, enrollment based claiming percentages
representing a proportion of the school's population eligible for free,
reduced price and paid benefits shall be developed and applied to total
daily meal counts of reimbursable meals at the point of service, or as
otherwise approved under part 210 of this chapter. For schools electing
to participate in Provision 2, these percentages shall be used for
claiming reimbursement for each year of the new cycle and any
extensions; or
(B) Participation based percentages. In accordance with guidance
established by the Food and Nutrition Service, establish a new Provision
2 base year by determining program eligibility on the basis of household
size and income, and direct certification if applicable, for a
statistically valid proportion of participating students established
over multiple operating days. The statistically valid measurement of the
school's student participation must be obtained during the first year of
the new cycle and meet the requirements of paragraph (k) of this
section. Using the data obtained, participation based claiming
percentages representing a proportion of the school's participating
students which are eligible for free, reduced price and paid benefits
shall be developed and applied to total daily meal counts of
reimbursable meals at the point of service or as otherwise approved
under part 210 of this chapter. These percentages shall be used for
claiming reimbursement for each year of the new cycle and any
extensions; or
(iv) Establish a Provision 3 base year. Schools may convert to
Provision 3
[[Page 302]]
using the procedures contained in paragraphs (e)(2)(ii) or (e)(2)(iii)
of this section.
(d) Provision 3. A school food authority of a school which serves
all enrolled children in that school reimbursable meals at no charge
during any period for up to 4 consecutive school years may elect to
receive Federal cash reimbursement and commodity assistance at the same
level as the total Federal cash and commodity assistance received by the
school during the last year that eligibility determinations for free and
reduced price meals were made and meals were counted by type (free,
reduced price and paid) at the point of service, or as otherwise
authorized under part 210 of this chapter. Such cash reimbursement and
commodity assistance will be adjusted for each of the 4 consecutive
school years pursuant to paragraph (d)(4) of this section. For purposes
of this paragraph (d), the term base year means the last complete school
year for which eligibility determinations were made and meal counts by
type were taken or the school year in which a school conducted a
streamlined base year as authorized under paragraph (e)(2)(iii) of this
section. The base year must begin at the start of a school year.
Reimbursable meals may be offered to all students at no charge or
students eligible for reduced price and paid meal benefits may be
charged for meals during a Provision 3 base, except that schools
conducting a Provision 3 streamlined base year must provide reimbursable
meals to all participating students at no charge in accordance with
paragraph (e)(2)(iii) of this section. The Provision 3 base year
immediately precedes, and is not included in, the 4-year cycle. This
alternative shall be known as Provision 3, and the following
requirements shall apply:
(1) Meals at no charge. Participating schools must serve
reimbursable meals, as determined by a point of service observation, or
as otherwise authorized under part 210 of this chapter, to all
participating children at no charge during non-base years of operation
or as specified in paragraph (e)(2)(iii) of this section, if applicable.
(2) Cost differential. The school food authority of a school
participating in Provision 3 must pay, with funds from non-Federal
sources, the difference between the cost of serving lunches and/or
breakfasts at no charge to all participating children and Federal
reimbursement.
(3) Meal counts. Participating schools must take total daily meal
counts of reimbursable meals served to participating children at the
point of service, or as otherwise authorized under part 210 of this
chapter, during the non-base years. Such meal counts must be retained at
the local level in accordance with paragraph (g) of this section. State
agencies may require the submission of the meal counts on the school
food authority's monthly Claim for Reimbursement or through other means.
In addition, school food authorities must establish a system of
oversight using the daily meal counts to ensure that participation has
not declined significantly from the base year. If participation declines
significantly, the school food authority must provide the school with
technical assistance, adjust the level of financial assistance received
through the State agency or return the school to standard eligibility
determination and meal counting procedures, as appropriate. In
residential child care institutions, the State agency may approve
implementation of Provision 3 without the requirement to obtain daily
meal counts of reimbursable meals at the point of service if:
(i) The State agency determines that enrollment, participation and
meal counts do not vary; and
(ii) There is an approved mechanism in place to ensure that students
will receive reimbursable meals.
(4) Annual adjustments. The State agency or school food authority
shall make annual adjustments for enrollment and inflation to the total
Federal cash and commodity assistance received by a Provision 3 school
in the base year. The adjustments shall be made for increases and
decreases in enrollment of children with access to the program(s). The
annual adjustment for enrollment shall be based on the school's base
year enrollment as of October 31 compared to the school's current year
enrollment as of October 31. Another date within the base year may be
used if it is approved by the State
[[Page 303]]
agency, and provides a more accurate reflection of the school's
enrollment or accommodates the reporting system in effect in that State.
If another date is used for the base year, the current year date must
correspond to the base year date of comparison. State agencies may, at
their discretion, make additional adjustments to a participating
school's enrollment more frequently than once per school year. If more
frequent enrollment is calculated, it must be applied for both upward
and downward adjustments. The annual adjustment for inflation shall be
effected through the application of the current year rates of
reimbursement. To the extent that the number of operating days in the
current school year differs from the number of operating days in the
base year, and the difference affects the number of meals, a prorata
adjustment shall also be made to the base year level of assistance, as
adjusted by enrollment and inflation. Upward and downward adjustments to
the number of operating days shall be made. Such adjustment shall be
effected by either:
(i) Multiplying the average daily meal count by type (free, reduced
price and paid) by the difference in the number of operating days
between the base year and the current year and adding/subtracting that
number of meals from the Claim for Reimbursement, as appropriate. In
developing the average daily meal count by type for the current school
year, schools shall use the base year data adjusted by enrollment; or
(ii) Multiplying the dollar amount otherwise payable (i.e., the base
year level of assistance, as adjusted by enrollment and inflation) by
the ratio of the number of operating days in the current year to the
number of operating days in the base year.
(5) Reporting requirements. The State agency shall submit to the
Department on the monthly FNS-10, Report of School Programs Operations,
the number of meals, by type (i.e., monthly meal counts by type for the
base year, as adjusted); or the number of meals, by type, constructed to
reflect the adjusted levels of cash assistance. State agencies may
employ either method to effect payment of reimbursement for Provision 3
schools.
(6) School food authority claims review process. During the
Provision 3 base year (not including a streamlined base year under
paragraph (e)(2)(iii) of this section), school food authorities are
required to review the lunch count data for each school under its
jurisdiction to ensure the accuracy of the monthly Claim for
Reimbursement in accordance with Sec. 210.8(a)(2) of this chapter.
During non-base years and streamlined base years, school food
authorities must conduct their own system of oversight or compare each
Provision 3 school's total daily meal counts to the school's total
enrollment, adjusted by an attendance factor. The school food authority
must promptly follow-up as specified in Sec. 210.8(a)(4) of this
chapter when the claims review suggests the likelihood of lunch count
problems. When a school elects to operate Provision 3 only in the School
Breakfast Program, school food authorities must continue to comply with
the claims review requirements of Sec. 210.8(a)(2) of this chapter for
the National School Lunch Program.
(7) Verification. Except as otherwise specified in Sec.
245.6a(a)(5), school food authorities are required to conduct
verification in accordance with Sec. 245.6a. When a school elects to
participate under Provision 3 for all of the meal programs in which it
participates (breakfast 7 CFR part 220 and/or lunch 7 CFR part 210), the
applications from that school are excluded from the school food
authority's required verification sample size and are exempt from
verification during non-base years.
(e) Extension of Provision 3. At the end of the initial cycle, and
each subsequent 4-year cycle, the State agency may allow a school to
continue under Provision 3 for another 4 years without taking new free
and reduced price applications and meal counts by type. State agencies
may grant an extension of Provision 3 if the school food authority can
establish, through available and approved socioeconomic data, that the
income level of the school's population, as adjusted for inflation, has
remained stable, declined, or has had
[[Page 304]]
only negligible improvement since the most recent base year.
(1) Extension criteria. School food authorities must submit to the
State agency available and approved socioeconomic data to establish
whether the income level of the school's population, as adjusted for
inflation, remained constant with the income level of the most recent
base year.
(i) Available and approved sources of socioeconomic data. Pre-
approved sources of socioeconomic data which may be used by school food
authorities to establish the income level of the school's population
are: local data collected by the city or county zoning and economic
planning office; unemployment data; local Food Stamp Program
certification data including direct certification; Food Distribution
Program on Indian Reservations data; statistical sampling of the
school's population using the application process; and Temporary
Assistance for Needy Families data (provided that the eligibility
standards were the same or more restrictive in the base year as the
current year with allowance for inflation). To grant an extension using
pre-approved socioeconomic data sources, State agencies must review and
evaluate the socioeconomic data submitted by the school food authority
to ensure that it is reflective of the school's population, provides
equivalent data for both the base year and the last year of the current
cycle, and demonstrates that the income level of the school's
population, as adjusted for inflation, has remained stable, declined or
had only negligible improvement. If the school food authority wants to
establish the income level of the school's population using alternate
sources of data, the use of such data must be approved by the Food and
Nutrition Service. Data from alternate sources must be reflective of the
school's population, be equivalent data for both the base year and the
last year of the current cycle, and effectively measure whether the
income level of the school's population, as adjusted for inflation, has
remained stable, declined or had only negligible improvement.
(ii) Negligible improvement. The change in the income level of the
school population shall be considered negligible if there is a 5 percent
or less improvement, after adjusting for inflation, over the base year
in the level of the socioeconomic indicator which is used to establish
the income level of the school's population.
(2) Extension not approved. Schools for which the available and
approved socioeconomic data does not reflect the school's population, is
not equivalent data for the base year and the last year of the current
cycle, or shows over 5 percent improvement after adjusting for
inflation, shall not be approved for an extension. Such schools must
elect one of the following options:
(i) Return to standard meal counting and claiming. Return to
standard meal counting and claiming procedures;
(ii) Establish a new base year. Establish a new Provision 3 base
year by taking new free and reduced price applications, making new free
and reduced price eligibility determinations, and taking point of
service counts of free, reduced price and paid meals for the first year
of the new cycle. Schools electing to establish a Provision 3 base year
shall follow procedures contained in paragraph (d) of this section;
(iii) Establish a streamlined base year. With prior approval by the
State agency, establish a streamlined base year by providing
reimbursable meals to all participating students at no charge and
developing either enrollment based or participation based claiming
percentages.
(A) Enrollment based percentages. In accordance with guidance
established by the Food and Nutrition Service, establish a new Provision
3 base year by determining program eligibility on the basis of household
size and income, and direct certification if applicable, for a
statistically valid proportion of the school's enrollment as of October
31, or other date approved by the State agency. The statistically valid
measurement of the school's enrollment must be obtained during the first
year of the new cycle and meet the requirements of paragraph (k) of this
section. Using the data obtained, enrollment based claiming percentages
representing a proportion of the school's population eligible for free,
reduced price and paid benefits shall be developed and applied
[[Page 305]]
to total daily meal counts of reimbursable meals at the point of
service, or as otherwise approved under part 210 of this chapter. For
schools electing to participate in Provision 3, the streamlined base
year level of assistance will be adjusted for enrollment, inflation and,
if applicable, operating days, for each subsequent year of the new cycle
and any extensions; or
(B) Participation based percentages. In accordance with guidance
established by the Food and Nutrition Service, establish a new Provision
3 base year by determining program eligibility on the basis of household
size and income, and direct certification if applicable, for a
statistically valid proportion of participating students established
over multiple operating days. The statistically valid measurement of the
school's student participation must be obtained during the first year of
the new cycle and meet the requirements of paragraph (k) of this
section. Using the data obtained, participation based claiming
percentages representing a proportion of the school's participating
students which are eligible for free, reduced price and paid benefits
shall be developed and applied to total daily meal counts of
reimbursable meals at the point of service or as otherwise approved
under part 210 of this chapter. For schools electing to participate in
Provision 3, the streamlined base year level of assistance as described
in this paragraph (e)(2)(iii)(B) will be adjusted for enrollment,
inflation and, if applicable, operating days, for each subsequent year
of the new cycle and any extensions; or
(iv) Establish a Provision 2 base year. Schools may convert to
Provision 2 using the procedures contained in paragraphs (c)(2)(ii) or
(c)(2)(iii) of this section.
(f) Policy statement requirement. A school food authority of a
Provision 1, 2, or 3 school shall:
(1) Amend its Free and Reduced Price Policy Statement, specified in
Sec. 245.10, to include a list of all schools participating in
Provision 1, 2, or 3, and for each school:
(i) The initial year of implementing the provision;
(ii) The years the cycle is expected to remain in effect;
(iii) The year the provision must be reconsidered; and
(iv) The available and approved socioeconomic data that will be used
in the reconsideration, if applicable.
(2) Certify that the school(s) meet the criteria for participating
in the special assistance provisions, as specified in paragraphs (a),
(b), (c), (d) or (e) of this section, as appropriate.
(g) Recordkeeping. School food authorities of schools implementing
Provision 1, 2 or 3 shall retain records related to the implementation
of the provision. Failure to maintain sufficient records shall result in
the State agency requiring the school to return to standard meal
counting and claiming procedures and/or fiscal action. Recordkeeping
requirements specific to Provision 2 and Provision 3 include:
(1) Base year records. A school food authority shall ensure that
records as specified in Sec. 210.15(b) and Sec. 220.7(e) of this
chapter which support subsequent year earnings are retained for the base
year for schools under Provision 2 and Provision 3. In addition, records
of enrollment data for the base year must be retained for schools under
Provision 3. Such base year records must be retained during the period
the provision is in effect, including all extensions, plus 3 fiscal
years after the submission of the last Claim for Reimbursement which
employed the base year data. School food authorities that conduct a
streamlined base year must retain all records related to the statistical
methodology and the determination of claiming percentages. Such records
shall be retained during the period the provision is in effect,
including all extensions, plus 3 fiscal years after the submission of
the last Claim for Reimbursement which employed the streamlined base
year data. In either case, if audit findings have not been resolved,
base year records must be retained beyond the 3-year period as long as
required for the resolution of the issues raised by the audit.
(2) Non-base year records. School food authorities that are granted
an extension of a provision must retain records of the available and
approved socioeconomic data which is used to determine the income level
of the school's population for the base year and
[[Page 306]]
year(s) in which extension(s) are made. In addition, State agencies must
also retain records of the available and approved socioeconomic data
which is used to determine the income level of the school's population
for the base year and year(s) in which extensions are made. Such records
must be retained at both the school food authority level and at the
State agency during the period the provision is in effect, including all
extensions, plus 3 fiscal years after the submission of the last monthly
Claim for Reimbursement which employed base year data. If audit findings
have not been resolved, records must be retained beyond the 3-year
period as long as required for the resolution of the issues raised by
the audit. In addition, for schools operating under Provision 2, a
school food authority must retain non-base year records pertaining to
total daily meal count information, edit checks and on-site review
documentation. For schools operating under Provision 3, a school food
authority must retain non-base year records pertaining to total daily
meal count information, the system of oversight or edit checks, on-site
review documentation, annual enrollment data and the number of operating
days, which are used to adjust the level of assistance. Such records
shall be retained for three years after submission of the final monthly
Claim for Reimbursement for the fiscal year.
(h) Availability of documentation. Upon request, the school food
authority shall make documentation including enrollment data,
participation data, available and approved socioeconomic data that was
used to grant the extension, if applicable, or other data available at
any reasonable time for monitoring and audit purposes. In addition, upon
request from the Food and Nutrition Service, school food authorities
under Provision 2 or Provision 3, or State agencies shall submit to the
Food and Nutrition Service all data and documentation used in granting
extensions including documentation as specified in paragraphs (g) and
(h) of this section.
(i) Return to standard meal counting and claiming. A school food
authority may return a school to standard notification, certification
and counting procedures at any time if standard procedures better suit
the school's program needs. The school food authority will then notify
the State agency.
(j) Puerto Rico and Virgin Islands. Puerto Rico and the Virgin
Islands, where a statistical survey procedure is permitted in lieu of
eligibility determinations for each child, may either maintain their
standard procedures in accordance with Sec. 245.4 or may opt for
Provision 2 or Provision 3 provided the eligibility requirements as set
forth in paragraphs (a), (b), (c), (d) and (e) of this section are met,
as applicable.
(k) Statistical income measurements. Statistical income measurements
that are used under this section to establish enrollment or
participation base claiming percentages must comply with the standards
outlined as follows:
(1) For enrollment based claiming percentages, statistical income
measurements must meet the following standards:
(i) The sample frame shall be limited to enrolled students who have
access to the school meals program;
(ii) A sample of enrolled students shall be randomly selected from
the sample frame;
(iii) The response rate to the survey shall be at least 80 percent;
(iv) The number of households that complete the survey shall be
sufficiently large so that it can be asserted with 95 percent confidence
that the true percentage of students who are enrolled in the school,
have access to the school meals program, and are eligible for free meals
is within plus or minus 2.5 percentage points of the point estimate
determined from the sample; and
(v) To minimize statistical bias, data from all households that
complete the survey must be used when calculating the enrollment based
claiming percentages for paragraphs (c)(2)(iii)(A) and (e)(2)(iii)(A) of
this section.
(2) For participation based claiming percentages, statistical income
measurements must meet the following standards:
(i) The sample frame must be limited to students participating in
the meal program for which the participation based claiming percentages
are being developed;
[[Page 307]]
(ii) The sample frame must represent multiple operating days, as
established through guidance, in the meal program for which the
participation based claiming percentages are being developed;
(iii) A sample of participating students shall be randomly selected
from the sample frame;
(iv) The response rate to the survey shall be at least 80 percent;
(v) The number of households that complete the survey shall be
sufficiently large so that it can be asserted with 95 percent confidence
that the true percentage of participating students who are eligible for
free meals is within plus or minus 2.5 percentage points of the point
estimate determined from the sample; and,
(vi) To minimize statistical bias, data from all households that
complete the survey must be used when calculating the participation
based claiming percentages for paragraphs (c)(2)(iii)(B) and
(e)(2)(iii)(B) of this section.
(Sec. 9, Pub. L. 95-166, 91 Stat. 1336 (42 U.S.C. 1759a); secs. 805, and
819, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1773))
[Amdt. 19, 45 FR 67287, Oct. 10, 1980, as amended by Amdt. 23, 47 FR
14135, Apr. 2, 1982; 66 FR 48328, Sept. 20, 2001]
Sec. 245.10 Action by School Food Authorities.
(a) Each School Food Authority of a school desiring to participate
in the National School Lunch Program, School Breakfast Program, or to
provide free milk under the Special Milk Program, or to become a
commodity-only school shall submit for approval to the State agency a
free and reduced price policy statement. Once approved, the policy
statement shall be a permanent document which may be amended as
necessary, except as specified in paragraph (c) of this section. Such
policy statement, as a minimum, shall contain the following:
(1) The official or officials designated by the school food
authority to make eligibility determinations on its behalf for free and
reduced price meals or for free milk;
(2) An assurance that for children who are not categorically
eligible for free and reduced price benefits the school food authority
will determine eligibility for free and reduced price meals or free milk
in accordance with the current Income Eligibility Guidelines.
(3) The specific procedures the school food authority will use in
accepting applications from families for free and reduced price meals or
for free milk. Additionally, if the school food authority has opted to
determine eligibility for children from food stamp, FDPIR or TANF
households based on documentation obtained from the State or local
agency responsible for the Food Stamp, FDPIR or TANF Program, in lieu of
an application, the school food authority shall include the specific
procedures it will use to obtain the required documentation.
Additionally, school food authorities that have implemented direct
certification and that must provide households a notice of eligibility,
as specified in Sec. 245.6(b), must also include in their policy
statement a copy of the notice to households regarding their children's
eligibility under the direct certification provision.
(4) A description of the method or methods to be used to collect
payments from those children paying the full price of the meal or milk,
or a reduced price of a meal, which will prevent the overt
identification of the children receiving a free meal or free milk or a
reduced price meal, and
(5) An assurance that the school will abide by the hearing procedure
set forth in Sec. 245.7 and the nondiscrimination practices set forth
in Sec. 245.8.
(b) The policy statement submitted by each school food authority
shall be accompanied by a copy of the application form to be used by the
school and of the proposed letter or notice to parents.
(c) Each school food authority shall amend its permanent free and
reduced price policy statement to reflect substantive changes. Any
amendment to a policy shall be approved by the State agency prior to
implementation, or as provided in paragraph (e) of this section. Each
year, if a School Food Authority does not have its policy statement
approved by the State agency, or FNSRO where applicable, by October 15,
reimbursement shall be suspended for any meals or milk served until such
time as the School Food Authority's
[[Page 308]]
free and reduced price policy statement has been approved by the State
agency, or FNSRO where applicable. Furthermore, no commodities donated
by the Department shall be used in any school after October 15, until
such time as the School Food Authority's free and reduced price policy
statement has been approved by the State agency, or FNSRO where
applicable. Once the School Food Authority's free and reduced price
policy statement has been approved, reimbursement may be allowed, at the
discretion of the State agency, or FNSRO where applicable, for eligible
meals and milk served during the period of suspension.
(d) If any free and reduced price policy statement submitted for
approval by any School Food Authority to the State agency, or FNSRO
where applicable, is determined to be not in compliance with the
provisions of this part, the School Food Authority shall submit a policy
statement that does meet the provisions within 30 days after
notification by the State agency, or FNSO where applicable.
(e) When revision of a School Food Authority's approved free and
reduced price policy statement is necessitated because of a change in
the family-size income standards of the State agency, or FNSRO where
applicable, or because of other program changes, the School Food
Authority shall have 60 days from the date the State agency announces
the change in which to have its revised policy statement approved by the
State agency, or FNSRO where applicable. In the event that a School Food
Authority's proposed revised free and reduced price policy statement has
not been submitted to, and approved by, the State agency, or FNSRO where
applicable, within 60 days following the public announcement by the
State agency, reimbursement shall be suspended for any meals or milk
served after the end of the 60-day period. No commodities donated by the
Department shall be used in any school after the end of the 60-day
period, until such time as the School Food Authority's free and reduced
price policy statement has been approved by the State agency, or FNSRO
where applicable. Reimbursement may be allowed at the discretion of the
State agency, or FNSRO where applicable, for eligible meals and milk
served during the period of suspension once the School Food Authority's
free and reduced price policy statement has been approved by the State
agency, or FNSRO where applicable. Pending approval of a revision of a
policy statement, the existing statement shall remain in effect.
(Sec. 8, Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1758); sec. 5, Pub. L.
95-627, 92 Stat. 3619 (42 U.S.C. 1772); 44 U.S.C. 3506; sec. 803, Pub.
L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758))
[35 FR 14065, Sept. 4, 1970, as amended at 38 FR 14958, June 7, 1973;
Amdt. 6, 39 FR 30339, Aug. 22, 1974; Amdt. 8, 40 FR 57208, Dec. 8, 1975;
Admt. 13, 44 FR 33049, June 8, 1979; 47 FR 746, Jan. 7, 1982; 48 FR
12511, Mar. 25, 1983; 64 FR 50744, Sept. 20, 1999;64 FR 72474, Dec. 28,
1999]
Sec. 245.11 Action by State agencies and FNSROs.
(a) Each State agency, or FNSRO where applicable, shall, for schools
under its jurisdiction:
(1) As necessary, each State agency or FNSRO, as applicable, shall
issue a prototype free and reduced price policy statement and any other
instructions to ensure that each school food authority is fully informed
of the provisions of this part. If the State elects to establish for all
schools a maximum price for reduced price lunches that is less than 40
cents, the State shall establish such price in its prototype policy.
Such State shall then receive the adjusted national average factor
provided for in Sec. 210.4(b); (2) prescribe and publicly announce by
July 1 of each fiscal year, in accordance with Sec. 245.3(a), family-
size income standards. Any standards prescribed by FNSRO with respect to
nonprofit private schools shall be developed by FNSRO after consultation
with the State agency.
(a-1) When a revision of the family-size income standards of the
State agency, or FNSRO where applicable, is necessitated because of a
change in the Secretary's income poverty guidelines or because of other
program changes, the State agency shall publicly announce its revised
family-size income standards no later than 30 days after the Secretary
has announced such change.
[[Page 309]]
(b) State agencies, and FNSRO where applicable, shall review the
policy statements submitted by school-food authorities for compliance
with the provisions of this part and inform the school-food authorities
of any necessary changes or amendments required in any policy statement
to bring such statement into compliance. They shall notify school-food
authorities in writing of approval of their policy statements and shall
direct them to distribute promptly the public announcements required
under the provisions of Sec. 245.5.
(c) Each State agency, or FNSRO where applicable, shall instruct
School Food Authorities under their jurisdiction that they may not alter
or amend the eligibility criteria set forth in an approved policy
statement without advance approval of the State agency, or FNSRO where
applicable.
(d) Not later than 10 days after the State agency, or FNSRO where
applicable, announces its family-size income standards, it shall notify
School Food Authorities in writing of any amendment to their free and
reduced price policy statements necessary to bring the family-sized
income criteria into conformance with the State agency's or FNSRO's
family-size income standards.
(e) Except as provided in Sec. 245.10, the State agency, or FNSRO
where applicable, shall neither disburse any funds, nor authorize the
distribution of commodities donated by the Department to any school
unless the school food authority has an approved free and reduced price
policy statement on file with the State Agency, or FNSRO where
applicable.
(f) Each State agency, or FNSRO where applicable, shall, in the
course of its supervisory assistance, review and evaluate the
performance of School Food Authorities and of schools in fulfilling the
requirements of this part, and shall advise School Food Authorities of
any deficiencies found and any corrective action required to be taken.
(g) The State agency must notify FNS whether the TANF Program in
their State is comparable to or more restrictive than the State's Aid to
Families with Dependent Children Program that was in effect on June 1,
1995. Automatic eligibility and direct certification for TANF households
is allowed only in States in which FNS has been assured that the TANF
standards are comparable to or more restrictive than the program it
replaced. State agencies must inform FNS when there is a change in the
State's TANF Program that would no longer make households participating
in TANF automatically eligible for free school meals.
(h) The State agency shall take action to ensure the proper
implementation of Provisions 1, 2, and 3. Such action shall include:
(1) Notification. Notifying school food authorities of schools
implementing Provision 2 and/or 3 that each Provision 2 or Provision 3
school must return to standard eligibility determination and meal
counting procedures or apply for an extension under Provision 2 or 3.
Such notification must be in writing, and be sent no later than February
15, or other date established by the State agency, of the fourth year of
a school's current cycle;
(2) Return to standard procedures. Returning the school to standard
eligibility determination and meal counting procedures and fiscal action
as required under Sec. 210.19(c) of this chapter if the State agency
determines that records were not maintained; and
(3) Technical assistance. Providing technical assistance,
adjustments to the level of financial assistance for the current school
year, and returning the school to standard eligibility determination and
meal counting procedures, as appropriate, if a State agency determines
at any time that:
(i) The school or school food authority has not correctly
implemented Provision 1, Provision 2 or Provision 3;
(ii) Meal quality has declined because of the implementation of the
provision;
(iii) Participation in the program has declined over time;
(iv) Eligibility determinations or the verification procedures were
incorrectly conducted; or
(v) Meal counts were incorrectly taken or incorrectly applied.
(4) State agency recordkeeping. State agencies shall retain the
following information annually for the month of
[[Page 310]]
October and, upon request, submit to FNS:
(i) The number of schools using Provision 1, Provision 2 and
Provision 3 for NSLP;
(ii) The number of schools using Provision 2 and Provision 3 for SBP
only;
(iii) The number of extensions granted to schools using Provision 2
and Provision 3 during the previous school year;
(iv) The number of extensions granted during the previous year on
the basis of Food Stamp/FDPIR data;
(v) The number of extensions granted during the previous year on the
basis of Temporary Assistance for Needy Families (TANF) data;
(vi) The number of extensions granted during the previous year on
the basis of local data collected by a city or county zoning and/or
economic planning office;
(vii) The number of extensions granted during the previous year on
the basis of applications collected from enrolled students;
(viii) The number of extensions granted during the previous year on
the basis of statistically valid surveys of enrolled students; and
(ix) The number of extensions granted during the previous year on
the basis of alternate data as approved by the State agency's respective
FNS Regional Office.
(5) State agency approval. Prior to approval for participation under
Provision 2 or Provision 3, State agencies shall ensure school and/or
school food authority program compliance as required under Sec. Sec.
210.19(a)(4) and 220.13(k) of this chapter.
(i) No later than March 1, 2005 and by March 1st each year
thereafter, each State agency must collect annual verification data from
each school food authority as described in Sec. 245.6a(c) and in
accordance with guidelines provided by FNS. Each State agency must
analyze these data, determine if there are potential problems, and
formulate corrective actions and technical assistance activities that
will support the objective of certifying only those children eligible
for free or reduced price meals. No later than April 15, 2005 and by
April 15 each year thereafter, each State agency must report to FNS the
verification information in a consolidated electronic file that has been
reported to it as required under Sec. 245.6a(c), by school food
authority, and any ameliorative actions the State agency has taken or
intends to take in school food authorities with high levels of
applications changed due to verification. Contingent upon new funding to
support this purpose, FNS will also require each State agency to report
the aggregate number of students who were terminated as a result of
verification but who were reinstated as of February 15th. The first
report containing this data element would be required in the school year
beginning July 1, 2005 and each school year thereafter. State agencies
are encouraged to collect and report any or all verification data
elements before the required dates.
(Secs. 801, 803, 812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753,
1758, 1759(a), 1773, 1778))
[35 FR 14065, Sept. 4, 1970, as amended at 38 FR 14958, June 7, 1973;
Amdt. 8, 40 FR 57208, Dec. 8, 1975; 44 FR 1364, Jan. 5, 1979; 46 FR
51368, Oct. 20, 1981; 48 FR 12511, Mar. 25, 1983; 52 FR 19276, May 22,
1987; 64 FR 50744, Sept. 20, 1999; 64 FR 72474, Dec. 28, 1999; 66 FR
48333, Sept. 20, 2001; 68 FR 53490, Sept. 11, 2003]
Effective Date Note: At 68 FR 53490, Sept. 11, 2003, Sec. 245.11(i)
was added. This paragraph contains information collection and
recordkeeping requirements and will not become effective until approval
has been given by the Office of Management and Budget.
Sec. 245.12 Fraud penalties.
(a) Whoever embezzles, willfully misapplies, steals, or obtains by
fraud any funds, assets, or property provided under this part, whether
received directly or indirectly from the Department, shall--
(1) If such funds, assets, or property are of a value of $100 or
more, be fined not more than $25,000 or imprisoned not more than five
years of both; or
(2) If such funds, assets, or property are of a value of less than
$100, be fined not more than $1,000 or imprisoned not more than one year
or both.
(b) Whoever receives, conceals, or retains to his use or gain funds,
assets, or property provided under this part, whether received directly
or indirectly from the Department, knowing such funds, assets, or
property have been
[[Page 311]]
embezzled, willfully misapplied, stolen, or obtained by fraud, shall be
subject to the same penalties provided in paragraph (a) of this section.
(Sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760); sec. 14,
Pub. L. 95-627, 92 Stat. 3625-3626)
[Amdt. 14, 44 FR 37901, June 29, 1979, as amended at 64 FR 50744, Sept.
20, 1999]
Sec. 245.13 Information collection/recordkeeping--OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control
number
------------------------------------------------------------------------
245.3 (a), (b)............................................. 0584-0026
245.4...................................................... 0584-0026
245.5 (a), (b)............................................. 0584-0026
245.6 (a), (b), (c), (e)................................... 0584-0026
245.7(a)................................................... 0584-0026
245.9 (a), (b), (c)........................................ 0584-0026
245.10 (a), (d), (e)....................................... 0584-0026
245.11 (a), (a-1), (b), (c), (d), (f)...................... 0584-0026
245.13(a)-(c).............................................. 0584-0026
------------------------------------------------------------------------
[50 FR 53258, Dec. 31, 1985. Redesignated at 64 FR 50744, Sept. 20,
1999]
PART 246_SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND
CHILDREN--Table of Contents
Subpart A_General
Sec.
246.1 General purpose and scope.
246.2 Definitions.
246.3 Administration.
Subpart B_State and Local Agency Eligibility
246.4 State plan.
246.5 Selection of local agencies.
246.6 Agreements with local agencies.
Subpart C_Participant Eligibility
246.7 Certification of participants.
246.8 Nondiscrimination.
246.9 Fair hearing procedures for participants.
Subpart D_Participant Benefits
246.10 Supplemental foods.
246.11 Nutrition education.
Subpart E_State Agency Provisions
246.12 Food delivery systems.
246.13 Financial management system.
246.14 Program costs.
246.15 Program income other than grants.
246.16 Distribution of funds.
246.16a Infant formula cost containment.
246.17 Closeout procedures.
246.18 Administrative appeal of State agency actions.
Subpart F_Monitoring and Review
246.19 Management evaluation and monitoring reviews.
246.20 Audits.
246.21 Investigations.
Subpart G_Miscellaneous Provisions
246.22 Administrative appeal of FNS decisions.
246.23 Claims and penalties.
246.24 Procurement and property management.
246.25 Records and reports.
246.26 Other provisions.
246.27 Program information.
246.28 OMB control numbers.
Authority: 42 U.S.C. 1786.
Source: 50 FR 6121, Feb. 13, 1985, unless otherwise noted.
Subpart A_General
Sec. 246.1 General purpose and scope.
This part announces regulations under which the Secretary of
Agriculture shall carry out the Special Supplemental Nutrition Program
for Women, Infants and Children (WIC Program). Section 17 of the Child
Nutrition Act of 1966, as amended, states in part that the Congress
finds that substantial numbers of pregnant, postpartum and breastfeeding
women, infants and young children from families with inadequate income
are at special risk with respect to their physical and mental health by
reason of inadequate nutrition or health care, or both. The purpose of
the Program is to provide supplemental foods and nutrition education
through payment of cash grants to State agencies which administer the
Program through local agencies at no cost to eligible persons. The
Program shall serve as an adjunct to good health care during critical
times of growth and development, in order to prevent the occurrence of
health problems, including drug and other harmful substance abuse, and
to
[[Page 312]]
improve the health status of these persons. The program shall be
supplementary to the Food Stamp Program; any program under which foods
are distributed to needy families in lieu of food stamps; and receipt of
food or meals from soup kitchens, or shelters, or other forms of
emergency food assistance.
[50 FR 6121, Feb. 13, 1985, as amended at 54 FR 51294, Dec. 14, 1989; 58
FR 11506, Feb. 26, 1993]
Sec. 246.2 Definitions.
For the purpose of this part and all contracts, guidelines,
instructions, forms and other documents related hereto, the term:
Above-50-percent vendors means vendors that derive more than 50
percent of their annual food sales revenue from WIC food instruments,
and new vendor applicants expected to meet this criterion under
guidelines approved by FNS.
Affirmative Action Plan means that portion of the State Plan which
describes how the Program will be initiated and expanded within the
State's jurisdiction in accordance with Sec. 246.4(a).
A-130 means Office of Management and Budget Circular A-130, which
provides guidance for the coordinated development and operation of
information systems.
Applicants means pregnant women, breastfeeding women, postpartum
women, infants, and children who are applying to receive WIC benefits,
and the breastfed infants of applicant breastfeeding women. Applicants
include individuals who are currently participating in the program but
are re-applying because their certification period is about to expire.
Authorized supplemental foods means those supplemental foods
authorized by the State or local agency for issuance to a particular
participant.
Breastfeeding means the practice of feeding a mother's breastmilk to
her infant(s) on the average of at least once a day.
Breastfeeding women means women up to one year postpartum who are
breastfeeding their infants.
Categorical eligibility means persons who meet the definitions of
pregnant women, breastfeeding women, postpartum women, or infants or
children.
Certification means the implementation of criteria and procedures to
assess and document each applicant's eligibility for the Program.
Children means persons who have had their first birthday but have
not yet attained their fifth birthday.
Clinic means a facility where applicants are certified.
Competent professional authority means an individual on the staff of
the local agency authorized to determine nutritional risk and prescribe
supplemental foods. The following persons are the only persons the State
agency may authorize to serve as a competent professional authority:
Physicians, nutritionists (bachelor's or master's degree in Nutritional
Sciences, Community Nutrition, Clinical Nutrition, Dietetics, Public
Health Nutrition or Home Economics with emphasis in Nutrition),
dieticians, registered nurses, physician's assistants (certified by the
National Committee on Certification of Physician's Assistants or
certified by the State medical certifying authority), or State or local
medically trained health officials. This definition also applies to an
individual who is not on the staff of the local agency but who is
qualified to provide data upon which nutritional risk determinations are
made by a competent professional authority on the staff of the local
agency.
Competitive bidding means a procurement process under which FNS or
the State agency selects a single source (such as a single infant
formula manufacturer offering the lowest price), as determined by the
submission of sealed bids, for a product for which bids are sought for
use in the Program.
Compliance buy means a covert, on-site investigation in which a
representative of the Program poses as a participant, parent or
caretaker of an infant or child participant, or proxy, transacts one or
more food instruments, and does not reveal during the visit that he or
she is a program representative.
Contract brand infant formula means all infant formulas (except
exempt infant formulas) produced by the manufacturer awarded the infant
formula cost containment contract. If under a
[[Page 313]]
single solicitation the manufacturer subcontracts for soy-based infant
formula, then all soy-based infant formulas covered by the subcontract
are also considered contract brand infant formulas (see Sec.
246.16a(c)(1)(i)). If a State agency elects to solicit separate bids for
milk-based and soy-based infant formulas, all infant formulas issued
under each contract are considered the contract brand infant formula
(see Sec. 246.16a(c)(1)(ii)). For example, all of the milk-based infant
formulas issued by a State agency that are produced by the manufacturer
that was awarded the milk-based contract are considered contract brand
infant formulas. Similarly, all of the soy-based infant formulas issued
by a State agency that are produced by the manufacturer that was awarded
the soy-based contract are also considered to be contract brand infant
formulas. Contract brand infant formulas also include all infant
formulas (except exempt infant formulas) introduced after the contract
is awarded.
Cost containment measure means a competitive bidding, rebate, direct
distribution, or home delivery system implemented by a State agency as
described in its approved State Plan of operation and administration.
CSFP means the Commodity Supplemental Food Program administered by
the Department, authorized by section 5 of the Agriculture and Consumer
Protection Act of 1973, as amended, and governed by part 247 of this
title.
Days means calendar days.
Department means the U.S. Department of Agriculture.
Discount means, with respect to a State agency that provides Program
foods to participants without the use of retail grocery stores (such as
a State agency that provides for the home delivery or direct
distribution of supplemental food), the amount of the price reduction or
other price concession provided to any State agency by the manufacturer
or supplier of the particular food product as the result of the purchase
of Program food by each such State agency, or its representative, from
the manufacturer or supplier.
Disqualification means the act of ending the Program participation
of a participant, authorized food vendor, or authorized State or local
agency, whether as a punitive sanction or for administrative reasons.
Documentation means the presentation of written documents which
substantiate statements made by an applicant or participant or a person
applying on behalf of an applicant.
Drug means:
(a) A beverage containing alcohol;
(b) A controlled substance (having the meaning given it in section
102(6) of the Controlled Substance Act (21 U.S.C. 802(6)); or
(c) A controlled substance analogue (having the meaning given it in
section 102(32) of the Controlled Substance Act (21 U.S.C. 802(32)).
Dual participation means simultaneous participation in the Program
in one or more than one WIC clinic, or participation in the Program and
in the CSFP during the same period of time.
Exempt infant formula means an infant formula that meets the
requirements for an exempt infant formula under section 412(h) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 350a(h)) and the
regulations at 21 CFR parts 106 and 107.
Family means a group of related or nonrelated individuals who are
living together as one economic unit, except that residents of a
homeless facility or an institution shall not all be considered as
members of a single family.
Fiscal year means the period of 12 calendar months beginning October
1 of any calendar year and ending September 30 of the following calendar
year.
FNS means the Food and Nutrition Service of the U.S. Department of
Agriculture.
Food costs means the costs of supplemental foods, determined in
accordance with Sec. 246.14(b).
Food delivery system means the method used by State and local
agencies to provide supplemental foods to participants.
Food instrument means a voucher, check, electronic benefits transfer
card (EBT), coupon or other document which is used by a participant to
obtain supplemental foods.
Food sales means sales of all Food Stamp Program eligible foods
intended
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for home preparation and consumption, including meat, fish, and poultry;
bread and cereal products; dairy products; fruits and vegetables. Food
items such as condiments and spices, coffee, tea, cocoa, and carbonated
and noncarbonated drinks may be included in food sales when offered for
sale along with foods in the categories identified above. Food sales do
not include sales of any items that cannot be purchased with food stamp
benefits, such as hot foods or food that will be eaten in the store.
Health services means ongoing, routine pediatric and obstetric care
(such as infant and child care and prenatal and postpartum examinations)
or referral for treatment.
High-risk vendor means a vendor identified as having a high
probability of committing a vendor violation through application of the
criteria established in Sec. 246.12(j)(3) and any additional criteria
established by the State agency.
Home food delivery contractor means a sole proprietorship,
partnership, cooperative association, corporation, or other business
entity that contracts with a State agency to deliver authorized
supplemental foods to the residences of participants under a home food
delivery system.
Homeless facility means the following types of facilities which
provide meal service. A supervised publicly or privately operated
shelter (including a welfare hotel or congregate shelter) designed to
provide temporary living accommodations; a facility that provides a
temporary residence for individuals intended to be institutionalized; or
a public or private place not designed for, or normally used as, a
regular sleeping accommodation for human beings.
Homeless individual means a woman, infant or child:
(a) Who lacks a fixed and regular nighttime residence; or
(b) Whose primary nighttime residence is:
(1) A supervised publicly or privately operated shelter (including a
welfare hotel, a congregate shelter, or a shelter for victims of
domestic violence) designated to provide temporary living accommodation;
(2) An institution that provides a temporary residence for
individuals intended to be institutionalized;
(3) A temporary accommodation of not more than 365 days in the
residence of another individual; or
(4) A public or private place not designed for, or ordinarily used
as, a regular sleeping accommodation for human beings.
IHS means the Indian Health Service of the U.S. Department of Health
and Human Services.
Individual with disabilities means a handicapped person as defined
in 7 CFR 15b.3.
Infant formula means a food that meets the definition of an infant
formula in section 201(z) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 321(z)) and that meets the requirements for an infant formula
under section 412 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
350a) and the regulations at 21 CFR parts 106 and 107.
Institution means any residential accommodation which provides meal
service, except private residences and homeless facilities.
Infants means persons under one year of age.
Inventory audit means the examination of food invoices or other
proofs of purchase to determine whether a vendor has purchased
sufficient quantities of supplemental foods to provide participants the
quantities specified on food instruments redeemed by the vendor during a
given period of time.
Local agency means: (a) A public or private, nonprofit health or
human service agency which provides health services, either directly or
through contract, in accordance with Sec. 246.5; (b) an IHS service
unit; (c) an Indian tribe, band or group recognized by the Department of
the Interior which operates a health clinic or is provided health
services by an IHS service unit; or (d) an intertribal council or group
that is an authorized representative of Indian tribes, bands or groups
recognized by the Department of the Interior, which operates a health
clinic or is provided health services by an IHS service unit.
Members of populations means persons with a common special need who
do not
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necessarily reside in a specific geographic area, such as off-
reservation Indians or migrant farmworkers and their families.
Migrant farmworker means an individual whose principal employment is
in agriculture on a seasonal basis, who has been so employed within the
last 24 months, and who establishes, for the purposes of such
employment, a temporary abode.
Net price means the difference between an infant formula
manufacturer's lowest national wholesale price per unit for a full
truckload of infant formula and the rebate level or the discount offered
or provided by the manufacturer under an infant formula cost containment
contract.
Non-contract brand infant formula means all infant formula,
including exempt infant formula, that is not covered by an infant
formula cost containment contract awarded by that State agency.
Nonprofit agency means a private agency which is exempt from income
tax under the Internal Revenue Code of 1954, as amended.
Nutrition education means individual or group education sessions and
the provision of information and educational materials designed to
improve health status, achieve positive change in dietary habits, and
emphasize relationships between nutrition and health, all in keeping
with the individual's personal, cultural, and socioeconomic preferences.
Nutrition Services and Administration (NSA) Costs means those direct
and indirect costs, exclusive of food costs, as defined in Sec.
246.14(c), which State and local agencies determine to be necessary to
support Program operations. Costs include, but are not limited to, the
costs of Program administration, start-up, monitoring, auditing, the
development of and accountability for food delivery systems, nutrition
education and breastfeeding promotion and support, outreach,
certification, and developing and printing food instruments.
Nutritional risk means: (a) Detrimental or abnormal nutritional
conditions detectable by biochemical or anthropometric measurements; (b)
Other documented nutritionally related medical conditions; (c) Dietary
deficiencies that impair or endanger health; (d) Conditions that
directly affect the nutritional health of a person, including alcoholism
or drug abuse; or (e) Conditions that predispose persons to inadequate
nutritional patterns or nutritionally related medical conditions,
including, but not limited to, homelessness and migrancy.
OIG means the Department's Office of the Inspector General.
Other harmful substances means other substances such as tobacco,
prescription drugs and over-the-counter medications that can be harmful
to the health of the WIC population, especially the pregnant woman and
her fetus.
Participants means pregnant women, breastfeeding women, postpartum
women, infants and children who are receiving supplemental foods or food
instruments under the Program, and the breastfed infants of participant
breastfeeding women.
Participant violation means any intentional action of a participant,
parent or caretaker of an infant or child participant, or proxy that
violates Federal or State statutes, regulations, policies, or procedures
governing the Program. Participant violations include intentionally
making false or misleading statements or intentionally misrepresenting,
concealing, or withholding facts to obtain benefits; exchanging food
instruments or supplemental foods for cash, credit, non-food items, or
unauthorized food items, including supplemental foods in excess of those
listed on the participant's food instrument; threatening to harm or
physically harming clinic or vendor staff; and dual participation.
Participation means the sum of the number of persons who have
received supplemental foods or food instruments during the reporting
period and the number of infants breastfed by participant breastfeeding
women (and receiving no supplemental foods or food instruments) during
the reporting period.
Postpartum women means women up to six months after termination of
pregnancy.
Poverty income guidelines means the poverty income guidelines
prescribed by the Department of Health and
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Human Services. These guidelines are adjusted annually by the Department
of Health and Human Services, with each annual adjustment effective July
1 of each year. The poverty income guidelines prescribed by the
Department of Health and Human Services shall be used for all States, as
defined in this section, except for Alaska and Hawaii. Separate poverty
income guidelines are prescribed for Alaska and Hawaii.
Pregnant women means women determined to have one or more embryos or
fetuses in utero.
Price adjustment means an adjustment made by the State agency, in
accordance with the vendor agreement, to the purchase price on a food
instrument after it has been submitted by a vendor for redemption to
ensure that the payment to the vendor for the food instrument complies
with the State agency's price limitations.
Program means the Special Supplemental Nutrition Program for Women,
Infants and Children (WIC) authorized by section 17 of the Child
Nutrition Act of 1966, as amended.
Proxy means any person designated by a woman participant, or by a
parent or caretaker of an infant or child participant, to obtain and
transact food instruments or to obtain supplemental foods on behalf of a
participant. The proxy must be designated consistent with the State
agency's procedures established pursuant to Sec. 246.12(r)(1). Parents
or caretakers applying on behalf of child and infant participants are
not proxies.
Rebate means the amount of money refunded under cost containment
procedures to any State agency from the manufacturer of the particular
food product as the result of the purchase of the supplemental food with
a voucher or other purchase instrument by a participant in each State
agency's program. Such rebates shall be payments made subsequent to the
exchange of a food instrument for food.
Remote Indian or Native village means an Indian or Native village
that is located in a rural area, has a population of less than 5,000
inhabitants, and is not accessible year-round by means of a public road
(as defined in 23 U.S.C. 101).
Routine monitoring means overt, on-site monitoring during which
program representatives identify themselves to vendor personnel.
Secretary means the Secretary of Agriculture.
SFPD means the Supplemental Food Programs Division of the Food and
Nutrition Service of the U.S. Department of Agriculture.
7 CFR part 3016 means the Department's Uniform Federal Assistance
Regulations. Part 3016 implements the policies established by the Office
of Management and Budget (OMB) in Circulars A-21, A-87, A-102, A-110,
and A-122, as well as OMB Guidance on Implementation of the Federal
Grant and Cooperative Agreement Act of 1977.
7 CFR part 3017 means the Department's Common Rule regarding
Governmentwide Debarment and Suspension (Non-procurement) and
Governmentwide Requirements for Drug-Free Workplace. Part 3017
implements the requirements established by Executive Order 12549
(February 18, 1986) and sections 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690).
7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
the Northern Marianas Islands, and the Trust Territory of the Pacific
Islands.
State agency means the health department or comparable agency of
each State; an Indian tribe, band or group recognized by the Department
of the Interior; an intertribal council or group which is an authorized
representative of Indian tribes, bands or groups recognized by the
Department of the Interior and which has an ongoing relationship with
such tribes, bands or groups for other purposes and has contracted with
them to administer the Program; or the appropriate area office of the
IHS.
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State Plan means a plan of Program operation and administration that
describes the manner in which the State agency intends to implement and
operate all aspects of Program administration within its jurisdiction in
accordance with Sec. 246.4.
Supplemental foods means those foods containing nutrients determined
to be beneficial for pregnant, breastfeeding, and postpartum women,
infants and children, as prescribed by the Secretary in Sec. 246.10.
Vendor means a sole proprietorship, partnership, cooperative
association, corporation, or other business entity operating one or more
stores authorized by the State agency to provide authorized supplemental
foods to participants under a retail food delivery system. Each store
operated by a business entity constitutes a separate vendor and must be
authorized separately from other stores operated by the business entity.
Each store must have a single, fixed location, except when the
authorization of mobile stores is necessary to meet the special needs
described in the State agency's State Plan in accordance with Sec.
246.4(a)(14)(xiv).
Vendor authorization means the process by which the State agency
assesses, selects, and enters into agreements with stores that apply or
subsequently reapply to be authorized as vendors.
Vendor limiting criteria means criteria established by the State
agency to determine the maximum number and distribution of vendors it
authorizes pursuant to Sec. 246.12(g)(2).
Vendor overcharge means intentionally or unintentionally charging
the State agency more for authorized supplemental foods than is
permitted under the vendor agreement. It is not a vendor overcharge when
a vendor submits a food instrument for redemption and the State agency
makes a price adjustment to the food instrument.
Vendor peer group system means a classification of authorized
vendors into groups based on common characteristics or criteria that
affect food prices, for the purpose of applying appropriate competitive
price criteria to vendors at authorization and limiting payments for
food to competitive levels.
Vendor selection criteria means the criteria established by the
State agency to select individual vendors for authorization consistent
with the requirements in Sec. 246.12(g)(3) and (g)(4).
Vendor violation means any intentional or unintentional action of a
vendor's current owners, officers, managers, agents, or employees (with
or without the knowledge of management) that violates the vendor
agreement or Federal or State statutes, regulations, policies, or
procedures governing the Program.
WIC means the Special Supplemental Nutrition Program for Women,
Infants and Children authorized by section 17 of the Child Nutrition Act
of 1966, 42 U.S.C. 1786.
WIC-eligible medical foods means certain enteral products that are
specifically formulated to provide nutritional support for individuals
with a diagnosed medical condition, when the use of conventional foods
is precluded, restricted, or inadequate. Such WIC-eligible medical foods
may be nutritionally complete or incomplete, but they must serve the
purpose of a food, provide a source of calories and one or more
nutrients, and be designed for enteral digestion via an oral or tube
feeding. WIC-eligible medical foods include many, but not all, products
that meet the definition of medical food in Section 5(b)(3) of the
Orphan Drug Act (21 U.S.C. 360ee(b)(3)).
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 52
FR 25189, July 2, 1987; 54 FR 51294, Dec. 14, 1989; 55 FR 9717, Mar. 15,
1990; 58 FR 11506, Feb. 26, 1993; 58 FR 47022, Sept. 7, 1993; 59 FR
11498, Mar. 11, 1994; 63 FR 63973, Nov. 18, 1998; 64 FR 13322, Mar. 18,
1999; 64 FR 56674, Oct. 21, 1999; 65 FR 3378, Jan. 21, 2000; 65 FR
53527, Sept. 5, 2000; 65 FR 51222, Aug. 23, 2000; 65 FR 77249, Dec. 11,
2000; 65 FR 83277, Dec. 29, 2000; 70 FR 71722, Nov. 29, 2005]
Sec. 246.3 Administration.
(a) Delegation to FNS. Within the Department, FNS shall act on
behalf of the Department in the administration of the Program. Within
FNS, SFPD and the Regional Offices are responsible for Program
administration. FNS shall provide assistance to State and local agencies
and evaluate all levels of Program operations to ensure that the goals
of the Program are achieved in
[[Page 318]]
the most effective and efficient manner possible.
(b) Delegation to State agency. The State agency is responsible for
the effective and efficient administration of the Program in accordance
with the requirements of this part; the Department's regulations
governing nondiscrimination (7 CFR parts 15, 15a and 15b); governing
administration of grants (7 CFR part 3016); governing nonprocurement
debarment/suspension and drug-free workplace (7 CFR part 3017); and
governing restrictions on lobbying (7 CFR part 3018); FNS guidelines;
and, instructions issued under the FNS Directives Management System. The
State agency shall provide guidance to local agencies on all aspects of
Program operations.
(c) Agreement and State Plan. (1) Each State agency desiring to
administer the Program shall annually submit a State Plan and enter into
a written agreement with the Department for administration of the
Program in the jurisdiction of the State agency in accordance with the
provisions of this part.
(2) The written agreement shall include a certification/assurance
regarding drug-free workplace as required by 7 CFR part 3017, and, if
applicable, a certification regarding lobbying and a disclosure of
lobbying activities as required by 7 CFR part 3018.
(d) State agency eligibility. A State agency shall be ineligible to
participate in the WIC Program if State or local sales tax is collected
on WIC food purchases in the area in which it administers the program,
except that, if sales tax is collected on WIC food purchases by
sovereign Indian entities which are not State agencies, the State agency
shall remain eligible if any vendors collecting such tax are
disqualified.
(e) State staffing standards. Each State agency shall ensure that
sufficient staff is available to administer an efficient and effective
Program including, but not limited to, the functions of nutrition
education, certification, food delivery, fiscal reporting, monitoring,
and training. Based on the June participation of the previous fiscal
year, each State agency, as a minimum, shall employ the following staff:
(1) A full-time or equivalent administrator when the monthly
participation level exceeds 1,500, or a half-time or equivalent
administrator when the monthly participation exceeds 500.
(2) At least one full-time or equivalent Program specialist for each
10,000 participants above 1,500, but the State agency need not employ
more than eight Program specialists unless the State agency considers it
necessary. Program specialists should be utilized for providing fiscal
management and technical assistance, monitoring vendors, reviewing local
agencies, training, and nutritional services, or other Program duties as
assigned by the State agency.
(3) For nutrition-related services, one full-time or equivalent
nutritionist when the monthly participation is above 1,500, or a half-
time or equivalent nutritionist when the monthly participation exceeds
500. The nutritionist shall be named State WIC Nutrition Coordinator and
shall meet State personnel standards and qualifications in paragraphs
(e)(3) (i), (ii), (iii), (iv), or (v) of this section and have the
qualifications in paragraph (e)(3)(vi) of this section. Upon request, an
exception to these qualifications may be granted by FNS. The State WIC
Nutrition Coordinator shall--
(i) Hold a Master's degree with emphasis in food and nutrition,
community nutrition, public health nutrition, nutrition education, human
nutrition, nutrition science or equivalent and have at least two years
responsible experience as a nutritionist in education, social service,
maternal and child health, public health, nutrition, or dietetics; or
(ii) Be registered or eligible for registration with the American
Dietetic Association and have at least two years experience; or
(iii) Have at least a Bachelor of Science or Bachelor of Arts
degree, from an accredited four-year institution, with emphasis in food
and nutrition, community nutrition, public health nutrition, nutrition
education, human nutrition, nutrition science or equivalent and have at
least three years of responsible experience as a nutritionist in
education, social service,
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maternal and child health, public health nutrition, or dietetics; or
(iv) Be qualified as a Senior Public Health Nutritionist under the
Department of Health and Human Services guidelines; or
(v) Meet the IHS standards for a Public Health Nutritionist; and
(vi) Have at least one of the following: Program development skills,
education background and experience in the development of educational
and training resource materials, community action experience, counseling
skills or experience in participant advocacy.
(4) A designated breastfeeding promotion coordinator, to coordinate
breastfeeding promotion efforts identified in the State plan in
accordance with the requirement of Sec. 246.4(a)(9) of this part. The
person to whom the State agency assigns this responsibility may perform
other duties as well.
(5) A staff person designated for food delivery system management.
The person to whom the State agency assigns this responsibility may
perform other duties as well.
(6) The State agency shall enforce hiring practices which comply
with the nondiscrimination criteria set forth in Sec. 246.8. The hiring
of minority staff is encouraged.
(f) Delegation to local agency. The local agency shall provide
Program benefits to participants in the most effective and efficient
manner, and shall comply with this part, the Department's regulations
governing nondiscrimination (7 CFR parts 15, 15a, 15b), the Department's
regulations governing the administration of grants (7 CFR part 3016),
Office of Management and Budget Circular A-130, and State agency and FNS
guidelines and instructions.
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 52
FR 21236, June 4, 1987; 59 FR 11499, Mar. 11, 1994; 65 FR 83277, Dec.
29, 2000]
Subpart B_State and Local Agency Eligibility
Sec. 246.4 State plan.
(a) Requirements. By August 15 of each year, each State agency shall
submit to FNS for approval a State Plan for the following fiscal year as
a prerequisite to receiving funds under this section. The State agency
may submit the State Plan in the format provided by FNS guidance.
Alternatively, the State agency may submit the Plan in combination with
other federally required planning documents or develop its own format,
provided that the information required below is included. FNS requests
advance notification that a State agency intends to use an alternative
format. The State Plan shall be signed by the State designated official
responsible for ensuring that the Program is operated in accordance with
the State Plan. FNS will provide written approval or denial of a
completed State Plan or amendment within 30 days of receipt. Within 15
days after FNS receives an incomplete Plan, FNS will notify the State
agency that additional information is needed to complete the Plan. Any
disapproval will be accompanied by a statement of the reasons for the
disapproval. After receiving approval of the State Plan, each State
agency shall only submit to FNS for approval substantive changes in the
State Plan. A complete and approved Plan shall include:
(1) An outline of the State agency's goals and objectives for
improving Program operations.
(2) A budget for nutrition services and administration funds, and an
estimate of food expenditures.
(3) An estimate of Statewide participation for the coming fiscal
year by category of women, infants and children.
(4) The State agency staffing pattern.
(5) An Affirmative Action Plan which includes--
(i) A list of all areas and special populations, in priority order
based on relative need, within the jurisdiction of the State agency, the
State agency's plans to initiate or expand operations under the Program
in areas most in need of supplemental foods, including plans to inform
nonparticipating local agencies of the availability and benefits of the
Program and the availability of technical assistance in implementing the
Program, and a description of how the State agency will take
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all reasonable actions to identify potential local agencies and
encourage agencies to implement or expand operations under the Program
within the following year in the neediest one-third of all areas
unserved or partially served;
(ii) An estimate of the number of potentially eligible persons in
each area and a list of the areas in the Affirmative Action Plan which
are currently operating the Program and their current participation,
which participant priority levels as specified in Sec. 246.7 are being
reached in each of these areas, and which areas in the Affirmative
Action Plan are currently operating CSFP and their current
participation; and
(iii) A list of the names and addresses of all local agencies.
(6) Plans to provide program benefits to eligible migrant
farmworkers and their families, to Indians, and to homeless individuals.
(7) The State agency's plans, to be conducted in cooperation with
local agencies, for informing eligible persons of the availability of
Program benefits, including the eligibility criteria for participation,
the location of local agencies operating the Program, and the
institutional conditions of Sec. 246.7(n)(1)(i) of this part, with
emphasis on reaching and enrolling eligible women in the early months of
pregnancy and migrants. Such information shall be publicly announced by
the State agency and by local agencies at least annually. Such
information shall also be distributed to offices and organizations that
deal with significant numbers of potentially eligible persons, including
health and medical organizations, hospitals and clinics, welfare and
unemployment offices, social service agencies, farmworker organizations,
Indian tribal organizations, organizations and agencies serving homeless
individuals, and religious and community organizations in low-income
areas.
(8) A description of how the State agency plans to coordinate
program operations with other services or programs that may benefit
participants in, or applicants for, the program.
(9) The State agency's nutrition education goals and action plans,
including a description of the methods that will be used to provide drug
and other harmful substance abuse information, promote breastfeeding,
and to meet the special nutrition education needs of migrant farmworkers
and their families, Indians, and homeless persons.
(10) For Indian State or local agencies that wish to apply for the
alternate income determination procedure in accordance with Sec.
246.7(d)(2)(vii), documentation that the majority of Indian household
members have incomes below eligibility criteria.
(11) A copy of the procedure manual developed by the State agency
for guidance to local agencies in operating the Program. The manual
shall include--
(i) Certification procedures, including a list of the specific
nutritional risk criteria by priority level which cites conditions and
indices to be used to determine a person's nutritional risk,
hematological data requirements including timeframes for the collection
of such data, the State agency's income guidelines for Program
eligibility, and any adjustments to the participant priority system made
pursuant to Sec. 246.7(e)(4) to accommodate high-risk postpartum women
or the addition of Priority VII;
(ii) Methods for providing nutrition education, including drug and
other harmful substance abuse information, to participants, including
homeless individuals;
(iii) Instructions concerning all food delivery operations performed
at the local level;
(iv) Instructions for providing all records and reports which the
State agency requires local agencies to maintain and submit; and
(v) Instructions on coordinating operations under the program with
drug and other harmful substance abuse counseling and treatment
services.
(12) A description of the State agency's financial management
system.
(13) A description of how the State agency will distribute nutrition
services and administration funds, including start-up funds, to local
agencies operating under the Program.
(14) A description of the food delivery system as it operates at the
State agency level, including--
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(i) Type of system. All food delivery systems in use within the
State agency's jurisdiction;
(ii) Vendor limiting and selection criteria. Vendor limiting
criteria, if used by the State agency, and the vendor selection criteria
established by the State agency consistent with the requirements in
Sec. 246.12(g)(3) and (g)(4);
(iii) Vendor agreement. A sample vendor agreement, including the
sanction schedule, which may be incorporated as an attachment or, if the
sanction schedule is in the State agency's regulations, through citation
to the regulations. State agencies that intend to delegate signing of
vendor agreements to local agencies must describe the State agency
supervision and instruction that will be provided to ensure the
uniformity and quality of local agency activities;
(iv) Vendor monitoring. The system for monitoring vendors to ensure
compliance and prevent fraud, waste, and program noncompliance, and the
State agency's plans for improvement in the coming year in accordance
with Sec. 246.12(j). The State agency must also include the criteria it
will use to determine which vendors will receive routine monitoring
visits. State agencies that intend to delegate any aspect of vendor
monitoring responsibilities to a local agency or contractor must
describe the State agency supervision and instruction that will be
provided to ensure the uniformity and quality of vendor monitoring;
(v) Options regarding trafficking convictions. The option exercised
by the State agency to sanction vendors pursuant to Sec.
246.12(k)(1)(i).
(vi) Food instruments. A facsimile of the food instrument, if used,
and a description of the system the State agency will use to account for
the disposition of food instruments in accordance with Sec. 246.12(q);
(vii) Names of contractors. The names of companies, excluding
authorized vendors, with whom the State agency has contracted to
participate in the operation of the food delivery system;
(viii) Nutrition services and administration funds conversion For
State agencies applying for authority to convert food funds to nutrition
services and administration funds under Sec. 246.16(g), a full
description of their proposed cost-cutting system or system
modification;
(ix) Homeless participants. If the State agency plans to adapt its
food delivery system to accommodate the needs of homeless individuals, a
description of such adaptations;
(x) Infant formula cost containment. A description of any infant
formula cost containment system. A State agency must submit a State Plan
or Plan amendment if it is attempting to structure and justify a system
that is not a single-supplier competitive bidding system for infant
formula in accordance with Sec. 246.16a(d); is requesting a waiver for
an infant formula cost containment system under Sec. 246.16a(e); or, is
planning to change or modify its current system or implement a system
for the first time. The amendment must be submitted at least 90 days
before the proposed effective date of the system change. The plan
amendment must include documentation for requests for waivers based on
interference with efficient or effective program operations; a cost
comparison analysis conducted under Sec. 246.16a(d)(2); and a
description of the proposed cost containment system. If FNS disputes
supporting plan amendment documentation, it will deem the Plan amendment
incomplete under this paragraph (a), and will provide the State agency
with a statement outlining disputed issues within 15 days of receipt of
the Plan amendment. The State agency may not enter into any infant
formula cost containment contract until the disputed issues are resolved
and FNS has given its consent. If necessary, FNS may grant a
postponement of implementation of an infant formula cost containment
system under Sec. 246.16a(f). If at the end of the postponement period
issues remain unresolved the State agency must proceed with a cost
containment system judged by FNS to comply with the provisions of this
part. If the State agency does not comply, it will be subject to the
penalties set forth in Sec. 246.16a(i);
(xi) Vendor training. The procedures the State agency will use to
train vendors in accordance with Sec. 246.12(i). State agencies that
intend to delegate
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any aspect of training to a local agency, contractor, or vendor
representative must describe the State agency supervision and
instruction that will be provided to ensure the uniformity and quality
of vendor training;
(xii) Food instrument security. A description of the State agency's
system for ensuring food instrument security in accordance with Sec.
246.12(p);
(xiii) Participant access determination criteria. A description of
the State agency's participant access determination criteria consistent
with Sec. 246.12(l); and
(xiv) Mobile stores. The special needs necessitating the
authorization of mobile stores, if the State agency chooses to authorize
such stores.
(xv) Vendor cost containment. A description of the State agency's
vendor peer group system, competitive price criteria, and allowable
reimbursement levels that demonstrates that the State agency is in
compliance with the cost containment provisions in Sec. 246.12(g)(4);
information on non-profit above-50-percent vendors that the State agency
has exempted from competitive price criteria and allowable reimbursement
levels in Sec. 246.12(g)(4)(iv); a justification and documentation
supporting the State agency's request for an exemption from the vendor
peer group requirement in Sec. 246.12(g)(4), if applicable; and, if the
State agency authorizes any above-50-percent vendors, information
required by FNS to determine whether the State agency's vendor cost
containment system meets the requirements in Sec. 246.12(g)(4)(i).
(xvi) Other cost containment systems. A description of any other
food cost containment systems (such as juice and cereal rebates and food
item restrictions).
(15) The State agency's plans to prevent and identify dual
participation in accordance with Sec. 246.7(l)(1)(i) and (l)(1)(ii). In
States where the Program and the CSFP operate in the same area, or where
an Indian State agency operates a Program in the same area as a
geographic State agency, a copy of the written agreement between the
State agencies for the detection and prevention of dual participation
shall be submitted.
(16) A description of the procedures the State will use to comply
with the civil rights requirements described in Sec. 246.8, including
the processing of discrimination complaints.
(17) A copy of the State agency's fair hearing procedures for
participants and the administrative appeal procedures for local agencies
and food vendors.
(18) The State agency's plan to reach and enroll migrants, and
eligible women in the early months of pregnancy.
(19) The State agency's plan to establish, to the extent
practicable, that homeless facilities, and institutions if it chooses to
make the Program available to them, meet the conditions established in
Sec. 246.7(n)(1)(i) of this part, if residents of such accommodations
are to be eligible to receive WIC Program benefits.
(20) A plan to provide program benefits to unserved infants and
children under the care of foster parents, protective services, or child
welfare authorities, including infants exposed to drugs perinatally.
(21) A plan to improve access to the Program for participants and
prospective applicants who are employed or who reside in rural areas, by
addressing their special needs through the adoption or revision of
procedures and practices to minimize the time participants and
applicants must spend away from work and the distances participants and
applicants must travel. The State agency shall also describe any plans
for issuance of food instruments to employed or rural participants, or
to any other segment of the participant population, through means other
than direct participant pick-up, pursuant to Sec. 246.12(r)(4). Such
description shall also include measures to ensure the integrity of
Program services and fiscal accountability.
(22) Assurance that each local agency and any subgrantees of the
State agency and/or local agencies are in compliance with the
requirements of 7 CFR part 3017 regarding nonprocurement debarment/
suspension.
(23) A description of the State agency's plans to provide and
maintain a drug-free workplace.
(b) Public comment. The State agency shall establish a procedure
under which
[[Page 323]]
members of the general public are provided an opportunity to comment on
the development of the State agency plan.
(c) Amendments. At any time after approval, the State agency may
amend the State Plan to reflect changes. The State agency shall submit
the amendments to FNS for approval. The amendments shall be signed by
the State designated official responsible for ensuring that the Program
is operated in accordance with the State Plan.
(d) Retention of copy. A copy of the approved State Plan or the WIC
portion of the State's composite plan of operations shall be kept on
file at the State agency for public inspection.
[50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21236, June 4, 1987; 53
FR 25314, July 6, 1988; 54 FR 51294, Dec. 14, 1989; 55 FR 9717, Mar. 15,
1990; 57 FR 34506, Aug. 5, 1992; 58 FR 11506, Feb. 26, 1993; 59 FR
11499, Mar. 11, 1994; 63 FR 63973, Nov. 18, 1998; 64 FR 13322, Mar. 18,
1999; 64 FR 70177, Dec. 16, 1999; 65 FR 51223, Aug. 23, 2000; 65 FR
53527, Sept. 5, 2000; 65 FR 83278, Dec. 29, 2000; 70 FR 71722, Nov. 29,
2005]
Sec. 246.5 Selection of local agencies.
(a) General. This section sets forth the procedures the State agency
shall perform in the selection of local agencies and the expansion,
reduction, and disqualification of local agencies already in operation.
In making decisions to intitiate, continue, and discontinue the
participation of local agencies, the State agency shall give
consideration to the need for Program benefits as delineated in the
Affirmative Action Plan.
(b) Application of local agencies. The State agency shall require
each agency, including subdivisions of the State agency, which desires
approval as a local agency, to submit a written local agency
application. After the receipt of an incomplete application, the State
agency shall provide written notification to the applicant agency of the
additional information needed. After the receipt of a complete
application, the State agency shall notify the applicant agency in
writing of the approval or disapproval of its application. When an
application is disapproved, the State agency shall advise the applicant
agency of the reasons for disapproval and of the right to appeal as set
forth in Sec. 246.18. When an agency submits an application and there
are no funds to serve the area, the applicant agency shall be notified
that there are currently no funds available for Program initiation or
expansion. The applicant agency shall be notified by the State agency
when funds become available.
(c) Program initiation and expansion. The State agency shall meet
the following requirements concerning Program initiation and expansion:
(1) The State agency shall fund local agencies serving those areas
or special populations most in need first, in accordance with their
order of priority as listed in the Affirmative Action Plan described in
Sec. 246.4(a)(5). The selection criteria cited in paragraph (d)(1) of
this section shall be applied to each area or special population before
eliminating that area from consideration and serving the next area of
special population. The State agency shall consider the number of
participants in each priority level being served by existing local
agencies in determining when it is appropriate to move into additional
areas in the Affirmative Action Plan or to expand existing operations in
an area. Additionally, the State agency shall consider the total number
of people potentially eligible in each area compared to the number being
served. Expansion of existing operations shall be in accordance with the
Affirmative Action Plan and may be based on the percentage of need being
met in each participant priority level.
(2) The State agency shall provide a written justification to FNS
for not funding an agency to serve the highest priority area or special
population. Such justification may include its inability to administer
the Program, lack of interest expressed for operating the Program, or
for those areas or special populations which are under consideration for
expansion of an existing operation, a determination by the State agency
that there is a greater need for funding an agency serving an area or
special population not operating the Program. The State agency shall use
the participant priority system in Sec. 246.7 as a measurement of
greater need in such determination.
(3) The State agency may fund more than one local agency to serve
the same area or special population as long
[[Page 324]]
as more than one local agency is necessary to serve the full extent of
need in that area or special population.
(d) Local agency priority system. The State agency shall establish
standards for the selection of new local agencies. Such standards shall
include the following considerations:
(1) The State agency shall consider the following priority system,
which is based on the relative availability of health and administrative
services, in the selection of local agencies:
(i) First consideration shall be given to a public or a private
nonprofit health agency that will provide ongoing, routine pediatric and
obstetric care and administrative services.
(ii) Second consideration shall be given to a public or a private
nonprofit health or human service agency that will enter into a written
agreement with another agency for either ongoing, routine pediatric and
obstetric care or administrative services.
(iii) Third consideration shall be given to a public or private
nonprofit health agency that will enter into a written agreement with
private physicians, licensed by the State, in order to provide ongoing,
routine pediatric and obstetric care to a specific category of
participants (women, infants or children).
(iv) Fourth consideration shall be given to a public or private
nonprofit human service agency that will enter into a written agreement
with private physicians, licensed by the State, to provide ongoing,
routine pediatric and obstetric care.
(v) Fifth consideration shall be given to a public or private
nonprofit health or human service agency that will provide ongoing,
routine pediatric and obstetric care through referral to a health
provider.
(2) When seeking new local agencies, the State agency shall publish
a notice in the media of the area next in line according to the
Affirmative Action Plan, unless the State agency has received an
application from a public or nonprofit private health agency in that
area which can provide adequate health and administrative services. The
notice shall include a brief explanation of the Program, a description
of the local agency priority system cited in this paragraph and a
request that potential local agencies notify the State agency of their
interest. In addition, the State agency shall contact all potential
local agencies in the area to ensure that they are aware of the
opportunity to apply for participation under the Program. If no agency
submits an application within 30 days, the State agency may then proceed
with the selection of a local agency in the area next in line according
to the Affirmative Action Plan. If sufficient funds are available, a
State agency shall give notice and consider applications in more than
one area at the same time but shall fund new local agencies in
conformance with the sequential ranking of the Affirmative Action Plan.
(e) Disqualification of local agencies. (1) The State agency may
disqualify a local agency--
(i) When the State agency determines noncompliance with Program
regulations;
(ii) When the State's Program funds are insufficient to support the
continued operation of all its existing local agencies at their current
participation level; or
(iii) When the State agency determines, following a review of local
agency credentials in accordance with paragraph (f) of this section,
that another local agency can operate the Program more effectively and
efficiently.
(2) The State agency may establish its own criteria for
disqualification of local agencies. The State agency shall notify the
local agency of any State-established criteria. In addition to any State
established criteria, the State agency shall consider, at a minimum--
(i) The availability of other community resources to participants
and the cost efficiency and cost effectiveness of the local agency in
terms of both food and nutrition services and administration costs;
(ii) The percentages of participants in each priority level being
served by the local agency and the percentage of need being met in each
participant category;
(iii) The relative position of the area or special population served
by the local agency in the Affirmative Action Plan;
[[Page 325]]
(iv) The local agency's place in the priority system in paragraph
(d)(1) of this section; and
(v) The capability of another local agency or agencies to accept the
local agency's participants.
(3) When disqualifying a local agency under the Program, the State
agency shall--
(i) Make every effort to transfer affected participants to another
local agency without disruption of benefits;
(ii) Provide the affected local agency with written notice not less
than 60 days in advance of the pending action which includes an
explanation of the reasons for disqualification, the date of
disqualification, and, except in cases of the expiration of a local
agency's agreement, the local agency's right to appeal as set forth in
Sec. 246.18; and
(iii) Ensure that the action is not in conflict with any existing
written agreements between the State and the local agency.
(f) Periodic review of local agency qualifications. The State agency
may conduct periodic reviews of the qualifications of authorized local
agencies under its jurisdiction. Based upon the results of such reviews
the State agency may make appropriate adjustments among the
participating local agencies, including the disqualification of a local
agency when the State agency determines that another local agency can
operate the Program more effectively and efficiently. In conducting such
reviews, the State agency shall consider the factors listed in paragraph
(e)(2) of this section in addition to whatever criteria it may develop.
The State agency shall implement the procedures established in paragraph
(e)(3) of this section when disqualifying a local agency.
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985; 65 FR 53527,
Sept. 5, 2000]
Sec. 246.6 Agreements with local agencies.
(a) Signed written agreements. The State agency shall enter into a
signed written agreement with each local agency, including subdivisions
of the State agency, which sets forth the local agency's
responsibilities for Program operations as prescribed in this part.
Copies of the agreement shall be kept on file at both the State and
local agencies for purposes of review and audit in accordance with
Sec. Sec. 246.19 and 246.20. Neither the State agency nor the local
agency has an obligation to renew the agreement. The expiration of an
agreement is not subject to appeal. The State agency shall provide local
agencies with advance written notice of the expiration of an agreement
as required under Sec. Sec. 246.5(e)(3)(ii) and 246.18(b)(1).
(b) Provisions of agreement. The agreement between the State agency
and each local agency shall ensure that the local agency--
(1) Complies with all the fiscal and operational requirements
prescribed by the State agency pursuant to this part, 7 CFR part 3016,
the debarment and suspension requirements of 7 CFR part 3017, if
applicable, the lobbying restrictions of 7 CFR part 3018, and FNS
guidelines and instructions, and provides on a timely basis to the State
agency all required information regarding fiscal and Program
information;
(2) Has a competent professional authority on the staff of the local
agency and the capabilities necessary to perform the certification
procedures;
(3) Makes available appropriate health services to participants and
informs applicants of the health services which are available;
(4) Prohibits smoking in the space used to carry out the WIC Program
during the time any aspect of WIC services are performed;
(5) Has a plan for continued efforts to make health services
available to participants at the clinic or through written agreements
with health care providers when health services are provided through
referral;
(6) Provides nutrition education services to participants, in
compliance with Sec. 246.11 and FNS guidelines and instructions;
(7) Implements a food delivery system prescribed by the State agency
pursuant to Sec. 246.12 and approved by FNS;
(8) Maintains complete, accurate, documented and current accounting
of all Program funds received and expended;
(9) Maintains on file and has available for review, audit, and
evaluation
[[Page 326]]
all criteria used for certification, including information on the area
served, income standards used, and specific criteria used to determine
nutritional risk; and
(10) Does not discriminate against persons on the grounds of race,
color, national origin, age, sex or handicap; and compiles data,
maintains records and submits reports as required to permit effective
enforcement of the nondiscrimination laws.
(c) Indian agencies. Each Indian State agency shall ensure that all
local agencies under its jurisdiction serve primarily Indian
populations.
(d) Health and human service agencies. When a health agency and a
human service agency comprise the local agency, both agencies shall
together meet all the requirements of this part and shall enter into a
written agreement which outlines all Program responsibilities of each
agency. The agreement shall be approved by the State agency during the
application process and shall be on file at both the State and local
agency. No Program funds shall be used to reimburse the health agency
for the health services provided. However, costs of certification borne
by the health agency may be reimbursed.
(e) Health or human service agencies and private physicians. When a
health or human service agency and private physician(s) comprise the
local agency, all parties shall together meet all of the requirements of
this part and shall enter into a written agreement which outlines the
inter-related Program responsibilities between the physician(s) and the
local agency. The agreement shall be approved by the State agency during
the application process and shall be on file at both agencies. The local
agency shall advise the State agency on its application of the name(s)
and address(es) of the private physician(s) participating and obtain
State agency approval of the written agreement. A competent professional
authority on the staff of the health or human service agency shall be
responsible for the certification of participants. No Program funds
shall be used to reimburse the private physician(s) for the health
services provided. However, costs of certification data provided by the
physician(s) may be reimbursed.
(f) Outreach/Certification In Hospitals. The State agency shall
ensure that each local agency operating the program within a hospital
and/or that has a cooperative arrangement with a hospital:
(1) Advises potentially eligible individuals that receive inpatient
or outpatient prenatal, maternity, or postpartum services, or that
accompany a child under the age of 5 who receives well-child services,
of the availability of program services; and
(2) To the extent feasible, provides an opportunity for individuals
who may be eligible to be certified within the hospital for
participation in the WIC Program.
[50 FR 6121, Feb. 13, 1985, as amended at 59 FR 11500, Mar. 11, 1994; 63
FR 63974, Nov. 18, 1998]
Subpart C_Participant Eligibility
Sec. 246.7 Certification of participants.
(a) Integration with health services. To lend administrative
efficiency and participant convenience to the certification process,
whenever possible, Program intake procedures shall be combined with
intake procedures for other health programs or services administered by
the State and local agencies. Such merging may include verification
procedures, certification interviews, and income computations. Local
agencies shall maintain and make available for distribution to all
pregnant, postpartum, and breastfeeding women and to parents or
caretakers of infants and children applying for and participating in the
Program a list of local resources for drug and other harmful substance
abuse counseling and treatment.
(b) Program referral and access. State and local agencies shall
provide WIC Program applicants and participants or their designated
proxies with information on other health-related and public assistance
programs, and when appropriate, shall refer applicants and participants
to such programs.
(1) The State agency shall provide each local WIC agency with
materials showing the maximum income limits, according to family size,
applicable to pregnant women, infants, and children
[[Page 327]]
up to age 5 under the medical assistance program established under Title
XIX of the Social Security Act (in this section, referred to as the
``Medicaid Program''). The local agency shall, in turn, provide to adult
individuals applying or reapplying for the WIC Program for themselves or
on behalf of others, written information about the Medicaid Program. If
such individuals are not currently participating in Medicaid but appear
to have family income below the applicable maximum income limits for the
program, the local agency shall also refer these individuals to
Medicaid, including the referral of infants and children to the
appropriate entity in the area authorized to determine eligibility for
early and periodic screening, diagnostic, and treatment (EPSDT)
services, and, the referral of pregnant women to the appropriate entity
in the area authorized to determine presumptive eligibility for the
Medicaid Program, if such determinations are being offered by the State.
(2) State agencies shall provide WIC services at community and
migrant health centers, Indian Health Services facilities, and other
federally health care supported facilities established in medically
underserved areas to the extent feasible.
(3) Local agencies may provide information about other potential
sources of food assistance in the local area to adult individuals
applying or reapplying in person for the WIC Program for themselves or
on behalf of others, when such applicants cannot be served because the
Program is operating at capacity in the local area.
(4) Each local agency that does not routinely schedule appointments
shall schedule appointments for employed adult individuals seeking to
apply or reapply for participation in the WIC Program for themselves or
on behalf of others so as to minimize the time such individuals are
absent from the workplace due to such application.
(5) Each local agency shall attempt to contact each pregnant woman
who misses her first appointment to apply for participation in the
Program in order to reschedule the appointment. At the time of initial
contact, the local agency shall request an address and telephone number
where the pregnant woman can be reached.
(c) Eligibility criteria. (1) To be certified as eligible for the
Program, infants, children, and pregnant, postpartum, and breastfeeding
women shall:
(i) In all State agencies except for Indian State agencies, meet the
requirement that the applicant reside within the jurisdiction of the
State. Indian State agencies may establish the requirement that
applicants reside within their jurisdiction. All State agencies may
determine a service area for any local agency, and may require that an
applicant reside within the service area. However, the State agency may
not use length of residency as an eligibility requirement.
(ii) Meet the income criteria specified in paragraph (d) of this
section.
(iii) Meet the nutritional risk criteria specified in paragraph (e)
of this section.
(2) A State, a State agency, and an Indian Tribal Organization
(including, an Indian tribe, band, or group recognized by the Department
of the Interior; or an intertribal council or group which is an
authorized representative of Indian tribes, bands or groups recognized
by the Department of the Interior and which has an ongoing relationship
with such tribes, bands or groups for other purposes and has contracted
with them to administer the Program) serving as a State agency, may
limit WIC participation to United States citizens, nationals, and
qualified aliens as these terms are defined in the Immigration and
Nationality Laws (8 U.S.C. 1101 et seq.). State agencies that implement
this option shall inform FNS of their intentions and provide copies of
the procedures they will establish regarding the limitation of WIC
services to United States citizens, nationals, and qualified aliens.
(d) Income criteria and income eligibility determinations. The State
agency shall establish, and provide local agencies with, income
guidelines, definitions, and procedures to be used in determining an
applicant's income eligibility for the Program.
(1) Income eligibility guidelines. The State agency may prescribe
income guidelines either equaling the income
[[Page 328]]
guidelines established under section 9 of the National School Lunch Act
for reduced-price school meals or identical to State or local guidelines
for free or reduced-price health care. However, in conforming Program
income guidelines to health care guidelines, the State agency shall not
establish Program guidelines which exceed the guidelines for reduced-
price school meals or are less than 100 percent of the revised poverty
income guidelines issued annually by the Department of Health and Human
Services. Program applicants who meet the requirements established by
paragraph (d)(2)(vi)(A) of this section shall not be subject to the
income limits established by State agencies under this paragraph.
(i) Local agency income eligibility guidelines. Different guidelines
may be prescribed for different local agencies within the State provided
that the guidelines are the ones used by the local agencies for
determining eligibility for free or reduced-price health care.
(ii) Annual adjustments in the income guidelines. On or before June
1 each year, FNS will announce adjustments in the income guidelines for
reduced-price meals under section 9 of the National School Lunch Act,
based on annual adjustments in the revised poverty income guidelines
issued by the Department of Health and Human Services.
(iii) Implementation of the income guidelines. On or before July 1
each year, each State agency shall announce and transmit to each local
agency the State agency's family size income guidelines, unless changes
in the poverty income guidelines issued by the Department of Health and
Human Services do not necessitate changes in the State or local agency's
income guidelines. The State agency may implement revised guidelines
concurrently with the implementation of income guidelines under the
Medicaid program established under Title XIX of the Social Security Act
(42 U.S.C. 1396 of et seq.). The State agency shall ensure that
conforming adjustments are made, if necessary, in local agency income
guidelines. The local agency shall implement (revised) guidelines not
later than July 1 of each year for which such guidelines are issued by
the State.
(2) Income eligibility determinations. The State agency shall ensure
that local agencies determine income through the use of a clear and
simple application form provided or approved by the State agency.
(i) Timeframes for determining income. In determining the income
eligibility of an applicant, the State agency may instruct local
agencies to consider the income of the family during the past 12 months
and the family's current rate of income to determine which indicator
more accurately reflects the family's status. However, persons from
families with adult members who are unemployed shall be eligible based
on income during the period of unemployment if the loss of income causes
the current rate of income to be less than the State or local agency's
income guidelines for Program eligibility.
(ii) Definition of ``Income''. If the State agency uses the National
School Lunch reduced-priced meal income guidelines, as specified in
paragraph (d)(1) of this section, it shall use the following definition
of income: Income for the purposes of this part means gross cash income
before deductions for income taxes, employees' social security taxes,
insurance premiums, bonds, etc. Income includes the following--
(A) Monetary compensation for services, including wages, salary,
commissions, or fees;
(B) Net income from farm and non-farm self-employment;
(C) Social Security benefits;
(D) Dividends or interest on savings or bonds, income from estates
or trusts, or net rental income;
(E) Public assistance or welfare payments;
(F) Unemployment compensation;
(G) Government civilian employee or military retirement or pensions
or veterans' payments;
(H) Private pensions or annuities;
(I) Alimony or child support payments;
(J) Regular contributions from persons not living in the household;
(K) Net royalties; and
(L) Other cash income. Other cash income includes, but is not
limited to, cash amounts received or withdrawn
[[Page 329]]
from any source including savings, investments, trust accounts and other
resources which are readily available to the family.
(iii) Use of a State or local health care definition of ``Income''.
If the State agency uses State or local free or reduced-price health
care income guidelines, as it is authorized to do in paragraph (d)(1) of
this section, it may use the State or local definition or definitions of
income used for the health care eligibility determinations. The State
agency shall ensure, however, that the State or local agency's
definition of income does not count the value of in-kind housing and
other in-kind benefits and payments or benefits listed in paragraph
(d)(2)(iv) of this section as income for Program purposes, and that
families with gross income, as defined in paragraph (d)(2)(ii) of this
section, in excess of 185 percent of the Federal guidelines specified
under paragraph (d)(1) of this section are not rendered eligible for
Program benefits, except that persons who meet the requirements of
paragraph (d)(2)(vi) of this section shall not be subject to limitations
established under this paragraph.
(iv) Income exclusions. (A) In determining income eligibility, the
State agency may exclude from consideration as income any:
(1) Basic allowance for housing received by military services
personnel residing off military installations or in privatized housing,
whether on- or off-base; and
(2) Cost-of-living allowance provided under 37 U.S.C. 405, to a
member of a uniformed service who is on duty outside the contiguous
states of the United States.
(B) The value of inkind housing and other inkind benefits, shall be
excluded from consideration as income in determining an applicant's
eligibility for the program.
(C) Payments or benefits provided under certain Federal programs or
acts are excluded from consideration as income by legislative
prohibition. The payments or benefits which must be excluded from
consideration as income include, but are not limited to:
(1) Reimbursements from the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (Pub. L. 91-646, sec. 216, 42
U.S.C. 4636);
(2) Any payment to volunteers under Title I (VISTA and others) and
Title II (RSVP, foster grandparents, and others) of the Domestic
Volunteer Service Act of 1973 (Pub. L. 93-113, sec. 404(g), 42 U.S.C.
5044(g)) to the extent excluded by that Act;
(3) Payment to volunteers under section 8(b)(1)(B) of the Small
Business Act (SCORE and ACE) (Pub. L. 95-510, sec. 101, 15 U.S.C.
637(b)(1)(D));
(4) Income derived from certain submarginal land of the United
States which is held in trust for certain Indian tribes (Pub. L. 94-114,
sec. 6, 25 U.S.C. 459e);
(5) Payments received under the Job Training Partnership Act (Pub.
L. 97-300, sec. 142(b), 29 U.S.C. 1552(b));
(6) Income derived from the disposition of funds to the Grand River
Band of Ottawa Indians (Pub. L. 94-540, sec. 6);
(7) Payments received under the Alaska Native Claims Settlement Act
(Pub. L. 100-241, sec. 15, 43 U.S.C. sec. 1626(c));
(8) The value of assistance to children or their families under the
National School Lunch Act, as amended (Pub. L. 94-105, sec. 9(d), 42
U.S.C. sec. 1760(e)), the Child Nutrition Act of 1966 (Pub. L. 89-642,
sec. 11(b), 42 U.S.C. sec. 1780(b)), and the Food Stamp Act of 1977
(Pub. L. 95-113, sec. 1301, 7 U.S.C. sec. 2017(b));
(9) Payments by the Indian Claims Commission to the Confederated
Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the
Mescalero Reservation (Pub. L. 95-433, sec. 2, 25 U.S.C. 609c-1);
(10) Payments to the Passamaquoddy Tribe and the Penobscot Nation or
any of their members received pursuant to the Maine Indian Claims
Settlement Act of 1980 (Pub. L. 96-420, sec. 6, 9(c), 25 U.S.C. 1725(i),
1728(c));
(11) Payments under the Low-income Home Energy Assistance Act, as
amended (Pub. L. 99-125, sec. 504(c), 42 U.S.C. sec. 8624(f));
(12) Student financial assistance received from any program funded
in whole or part under Title IV of the Higher Education Act of 1965,
including
[[Page 330]]
the Pell Grant, Supplemental Educational Opportunity Grant, State
Student Incentive Grants, National Direct Student Loan, PLUS, College
Work Study, and Byrd Honor Scholarship programs, which is used for costs
described in section 472 (1) and (2) of that Act (Pub. L. 99-498,
section 479B, 20 U.S.C. 1087uu). The specified costs set forth in
section 472 (1) and (2) of the Higher Education Act are tuition and fees
normally assessed a student carrying the same academic workload as
determined by the institution, and including the costs for rental or
purchase of any equipment, materials, or supplies required of all
students in the same course of study; and an allowance for books,
supplies, transportation, and miscellaneous personal expenses for a
student attending the institution on at least a half-time basis, as
determined by the institution. The specified costs set forth in section
472 (1) and (2) of the Act are those costs which are related to the
costs of attendance at the educational institution and do not include
room and board and dependent care expenses;
(13) Payments under the Disaster Relief Act of 1974, as amended by
the Disaster Relief and Emergency Assistance Amendments of 1989 (Pub. L.
100-707, sec. 105(i), 42 U.S.C. sec. 5155(d));
(14) Effective July 1, 1991, payments received under the Carl D.
Perkins Vocational Education Act, as amended by the Carl D. Perkins
Vocational and Applied Technology Education Act Amendments of 1990 (Pub.
L. 101-392, sec. 501, 20 U.S.C. sec. 2466d);
(15) Payments pursuant to the Agent Orange Compensation Exclusion
Act (Pub. L. 101-201, sec. 1);
(16) Payments received for Wartime Relocation of Civilians under the
Civil Liberties Act of 1988 (Pub. L. 100-383, sec. 105(f)(2), 50 App.
U.S.C. sec. 1989b-4(f)(2));
(17) Value of any child care payments made under section
402(g)(1)(E) of the Social Security Act, as amended by the Family
Support Act (Pub. L. 100-485, sec. 301, 42 U.S.C. sec. 602 (g)(1)(E));
(18) Value of any ``at-risk'' block grant child care payments made
under section 5081 of Pub. L. 101-508, which amended section 402(i) of
the Social Security Act;
(19) Value of any child care provided or paid for under the Child
Care and Development Block Grant Act, as amended (Pub. L. 102-586, Sec.
8(b)), 42 U.S.C. 9858q);
(20) Mandatory salary reduction amount for military service
personnel which is used to fund the Veteran's Educational Assistance Act
of 1984 (GI Bill), as amended (Pub. L. 99-576, sec. 303(a)(1), 38 U.S.C.
sec. 1411 (b));
(21) Payments received under the Old Age Assistance Claims
Settlement Act, except for per capita shares in excess of $2,000 (Pub.
L. 98-500, sec. 8, 25 U.S.C. sec. 2307);
(22) Payments received under the Cranston-Gonzales National
Affordable Housing Act, unless the income of the family equals or
exceeds 80 percent of the median income of the area (Pub. L. 101-625,
sec. 522(i)(4), 42 U.S.C. sec. 1437f nt);
(23) Payments received under the Housing and Community Development
Act of 1987, unless the income of the family increases at any time to
not less than 50 percent of the median income of the area (Pub. L. 100-
242, sec. 126(c)(5)(A), 25 U.S.C. sec. 2307);
(24) Payments received under the Sac and Fox Indian claims agreement
(Pub. L. 94-189, sec. 6);
(25) Payments received under the Judgment Award Authorization Act,
as amended (Pub. L. 97-458, sec. 4, 25 U.S.C. sec. 1407 and Pub. L. 98-
64, sec. 2(b), 25 U.S.C. sec. 117b(b));
(26) Payments for the relocation assistance of members of Navajo and
Hopi Tribes (Pub. L. 93-531, sec. 22, 22 U.S.C. sec. 640d-21);
(27) Payments to the Turtle Mountain Band of Chippewas, Arizona
(Pub. L. 97-403, sec. 9);
(28) Payments to the Blackfeet, Grosventre, and Assiniboine tribes
(Montana) and the Papago (Arizona) (Pub. L. 97-408, sec. 8(d));
(29) Payments to the Assiniboine Tribe of the Fort Belknap Indian
community and the Assiniboine Tribe of the Fort Peck Indian Reservation
(Montana) (Pub. L. 98-124, sec. 5);
(30) Payments to the Red Lake Band of Chippewas (Pub. L. 98-123,
sec. 3);
(31) Payments received under the Saginaw Chippewa Indian Tribe of
Michigan Distribution of Judgment
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Funds Act (Pub. L. 99-346, sec. 6(b)(2)); and
(32) Payments to the Chippewas of Mississippi (Pub. L. 99-377, sec.
4(b)).
(v) Are applicants required to document income eligibility? (A)
Adjuctively/automatically income eligible applicants. The State or local
agency must require applicants determined to be adjunctively or
automatically income eligible to document their eligibility for the
program that makes them income eligible as set forth in paragraph
(d)(2)(vi) of this section.
(B) Other applicants. The State or local agency must require all
other applicants to provide documentation of family income at
certification.
(C) Exceptions. The income documentation requirement does not apply
to an individual for whom the necessary documentation is not available
or an individual such as a homeless woman or child for whom the agency
determines the income documentation requirement would present an
unreasonable barrier to participation. Examples of individuals for whom
the necessary documentation is not available include those with no
income or no proof of income (such as an applicant or applicant's parent
who is a migrant farmworker or other individual who works for cash).
These are the only exceptions that may be used. When using these
exceptions, the State or local agency must require the applicant to sign
a statement specifying why he/she cannot provide documentation of
income. Such a statement is not required when there is no income.
(D) Verification. The State or local agency may require verification
of information it determines necessary to confirm income eligibility for
Program benefits.
(vi) Adjunct or automatic income eligibility. (A) The State agency
shall accept as income-eligible for the Program any applicant who
documents that he/she is:
(1) Certified as fully eligible to receive food stamps under the
Food Stamp Act of 1977, or certified as fully eligible, or presumptively
eligible pending completion of the eligibility determination process, to
receive Temporary Assistance for Needy Families (TANF) under Part A of
Title IV of the Social Security Act or Medical Assistance (i.e.,
Medicaid) under Title XIX of the Social Security Act; or
(2) A member of a family that is certified eligible to receive
assistance under TANF, or a member of a family in which a pregnant woman
or an infant is certified eligible to receive assistance under Medicaid.
(B) The State agency may accept, as evidence of income within
Program guidelines, documentation of the applicant's participation in
State-administered programs not specified in this paragraph that
routinely require documentation of income, provided that those programs
have income eligibility guidelines at or below the State agency's
Program income guidelines.
(C) Persons who are adjunctively income eligible, as set forth in
paragraphs (d)(2)(vi)(A) of this section, shall not be subject to the
income limits established under paragraph (d)(1) of this section.
(vii) Income eligibility of pregnant women. A pregnant woman who is
ineligible for participation in the program because she does not meet
income guidelines shall be considered to have satisfied the income
guidelines if the guidelines would be met by increasing the number of
individuals in her family by the number of embryos or fetuses in utero.
The same increased family size may also be used for any of the pregnant
woman's categorically eligible family members. The State agency shall
allow applicants to waive this increase in family size.
(viii) Income eligibility of Indian applicants. If an Indian State
agency (or a non-Indian State agency which acts on behalf of a local
agency operated by an Indian organization or the Indian Health Service)
submits census data or other reliable documentation demonstrating to FNS
that the majority of the Indian households in a local agency's service
area have incomes at or below the State agency's income eligibility
guidelines, FNS may authorize the State agency to approve the use of an
income certification system under which the local Indian agency shall
inform each Indian applicant household of the maximum family income
allowed for that applicant's family size. The local agency shall ensure
that the
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applicant, or the applicant's parent or caretaker, signs a statement
that the applicant's family income does not exceed the maximum. The
local agency may verify the income eligibility of any Indian applicant.
(ix) Are instream migrant farmworkers and their family members
required to document income eligibility? Certain instream migrant
farmworkers and their family members with expired Verification of
Certification cards shall be declared to satisfy the State agency's
income standard and income documentation requirements. Such cases
include when income of that instream migrant farmworker is determined at
least once every 12 months. Such families shall satisfy the income
criteria in any State for any subsequent certification while the migrant
is instream during the 12-month period following the determination. The
determination can occur either in the migrant's home base area before
the migrant has entered the stream for a particular agricultural season,
or in an instream area during the agricultural season.
(e) Nutritional risk. To be certified as eligible for the Program,
applicants who meet the Program's eligibility standards specified in
paragraph (c) of this section must be determined to be at nutritional
risk. A competent professional authority on the staff of the local
agency shall determine if a person is at nutritional risk through a
medical and/or nutritional assessment. This determination may be based
on referral data submitted by a competent professional authority not on
the staff of the local agency. Nutritional risk data shall be documented
in the participant's file and shall be used to assess an applicant's
nutritional status and risk, tailor the food package to address
nutritional needs, design appropriate nutrition education, and make
referrals to health and social services for follow-up, as necessary and
appropriate.
Except as stated in paragraph (e)(1)(v) of this section, at least
one determination of nutritional risk must be documented at the time of
certification in order for an income eligible applicant to receive WIC
benefits.
(1) Determination of nutritional risk. (i) Required nutritional risk
data. (A) At a minimum, height or length and weight measurements shall
be performed and/or documented in the applicant's file at the time of
certification. In addition, a hematological test for anemia such as a
hemoglobin, hematocrit, or free erythrocyte protoporphyrin test shall be
performed and/or documented at certification for applicants with no
other nutritional risk factor present. For applicants with a qualifying
nutritional risk factor present at certification, such test shall be
performed and/or documented within 90 days of the date of certification.
However, for breastfeeding women 6-12 months postpartum, such
hematological tests are not required if a test was performed after the
termination of their pregnancy. In addition, such hematological tests
are not required, but are permitted, for infants under nine months of
age. All infants nine months of age and older (who have not already had
a hematological test performed or obtained, between the ages of six and
nine months), shall have a hematological test performed between nine and
twelve months of age or obtained from referral sources. This
hematological test does not have to occur within 90 days of the date of
certification. Only one test is required for children between 12 and 24
months of age, and this test should be done 6 months after the infant
test, if possible. At the State or local agency's discretion, the
hematological test is not required for children ages two and older who
were determined to be within the normal range at their last
certification. However, the hematological test shall be performed on
such children at least once every 12 months. Hematological test data
submitted by a competent professional authority not on the staff of the
local agency may be used to establish nutritional risk. However, such
referral hematological data must:
(1) Be reflective of a woman applicant's category, meaning the test
must have been taken for pregnant women during pregnancy and for
postpartum or breastfeeding women following termination of pregnancy;
(2) Conform to the anemia screening schedule for infants and
children as
[[Page 333]]
outlined in paragraph (e)(1)(ii)(B) of this section; and
(3) Conform to recordkeeping requirements as outlined in paragraph
(i)(4) of this section.
(B) Height or length and weight measurements and, with the
exceptions specified in paragraph (e)(1)(v) of this section,
hematological tests, shall be obtained for all participants, including
those who are determined at nutritional risk based solely on the
established nutritional risk status of another person, as provided in
paragraphs (e)(1)(iv) and (e)(1)(v) of this section.
(ii) Timing of nutritional risk data. (A) Weight and height or
length. Weight and height or length shall be measured not more than 60
days prior to certification for program participation.
(B) Hematological test for anemia. (1) For pregnant, breastfeeding,
and postpartum women, and child applicants, the hematological test for
anemia shall be performed or obtained from referral sources at the time
of certification or within 90 days of the date of certification. The
hematological test for anemia may be deferred for up to 90 days from the
time of certification for applicants who have at least one qualifying
nutritional risk factor present at the time of certification. If no
qualifying risk factor is identified, a hematological test for anemia
must be performed or obtained from referral sources (with the exception
of presumptively eligible pregnant women).
(2) Infants nine months of age and older (who have not already had a
hematological test performed, between six and nine months of age, by a
competent professional authority or obtained from referral sources),
shall between nine and twelve months of age have a hematological test
performed or obtained from referral sources. Such a test may be
performed more than 90 days after the date of certification.
(3) For pregnant women, the hematological test for anemia shall be
performed during their pregnancy. For persons certified as postpartum or
breastfeeding women, the hematological test for anemia shall be
performed after the termination of their pregnancy. For breastfeeding
women who are 6-12 months postpartum, no additional blood test is
necessary if a test was performed after the termination of their
pregnancy. The participant or parent/guardian shall be informed of the
test results when there is a finding of anemia, and notations reflecting
the outcome of the tests shall be made in the participant's file.
Nutrition education, food package tailoring, and referral services shall
be provided to the participant or parent/guardian, as necessary and
appropriate.
(iii) Breastfeeding dyads. A breastfeeding woman may be determined
to be a nutritional risk if her breastfed infant has been determined to
be a nutritional risk. A breastfed infant can be certified based on the
mother's medical and/or nutritional assessment. A breastfeeding mother
and her infant shall be placed in the highest priority level for which
either is qualified.
(iv) Infants born to WIC mothers or women who were eligible to
participate in WIC. An infant under six months of age may be determined
to be at nutritional risk if the infant's mother was a Program
participant during pregnancy or of medical records document that the
woman was at nutritional risk during pregnancy because of detrimental or
abnormal nutritional conditions detectable by biochemical or
anthropometric measurements or other documented nutritionally related
medical conditions.
(v) Presumptive eligibility for pregnant women. A pregnant woman who
meets the income eligibility standards may be considered presumptively
eligible to participate in the program, and may be certified immediately
without an evaluation of nutritional risk for a period up to 60 days. A
nutritional risk evaluation of such woman shall be completed not later
than 60 days after the woman is certified for participation. A
hematological test for anemia is not required to be performed within the
60-day period, but rather within 90 days, unless the nutritional risk
evaluation performed does not identify a qualifying risk factor. If no
qualifying risk factor is identified, a hematological test for anemia
must be performed or obtained from referral sources before the 60-day
period elapses. Under the subsequent determination process, if
[[Page 334]]
the woman does not meet any qualifying nutritional risk criteria,
including anemia criteria, the woman shall be determined ineligible and
may not participate in the program for the reference pregnancy after the
date of the determination. Said applicant may subsequently reapply for
program benefits and if found to be both income eligible and at
qualifying nutritional risk may participate in the program. Persons
found ineligible to participate in the program under this paragraph
shall be advised in writing of the ineligibility, of the reasons for the
ineligibility, and of the right to a fair hearing. The reasons for the
ineligibility shall be properly documented and shall be retained on file
at the local agency. In addition, if the nutritional risk evaluation is
not completed within the 60-day timeframe, the woman shall be determined
ineligible.
(vi) Regression. A participant who has previously been certified
eligible for the Program may be considered to be at nutritional risk in
the next certification period if the competent professional authority
determines there is a possibility of regression in nutritional status
without the supplemental foods. The State agency may limit the number of
times and circumstances under which a participant may be certified due
to the possibility of regression.
(2) Nutritional risk criteria. The following are examples of
nutritional risk conditions which may be used as a basis for
certification. These examples include--
(i) Detrimental or abnormal nutritional conditions detectable by
biochemical or anthropometric measurements, such as anemia, underweight,
overweight, abnormal patterns of weight gain in a pregnant woman, low
birth weight in an infant, or stunting in an infant or child;
(ii) Other documented nutritionally related medical conditions, such
as clinical signs of nutritional deficiencies, metabolic disorders, pre-
eclampsia in pregnant women, failure to thrive in an infant, chronic
infections in any person, alcohol or drug abuse or mental retardation in
women, lead poisoning, history of high risk pregnancies or factors
associated with high risk pregnancies (such as smoking; conception
before 16 months postpartum; history of low birth weight, premature
births, or neonatal loss; adolescent pregnancy; or current multiple
pregnancy) in pregnant women, or congenital malformations in infants or
children, or infants born of women with alcohol or drug abuse histories
or mental retardation.
(iii) Dietary deficiencies that impair or endanger health, such as
inadequate dietary patterns assessed by a 24-hour dietary recall,
dietary history, or food frequency checklist; and
(iv) Conditions that predispose persons to inadequate nutritional
patterns or nutritionally related medical conditions, such as
homelessness or migrancy.
(3) Nutritional risk priorities. In determining nutritional risk,
the State agency shall develop and include in its State Plan, specific
risk conditions by priority level with indices for identifying these
conditions. The criteria shall be used statewide and in accordance with
the priority system as set forth in paragraph (e)(4) of this section.
(4) Nutritional risk priority system. The competent professional
authority shall fill vacancies which occur after a local agency has
reached its maximum participation level by applying the following
participant priority system to persons on the local agency's waiting
list. Priorities I through VI shall be utilized in all States. The State
agency may, at its discretion, expand the priority system to include
Priority VII. The State agency may set income or other sub-priority
levels within any of these seven priority levels. The State agency may
expand Priority III, IV, or V to include high-risk postpartum women. The
State agency may place pregnant or breastfeeding women and infants who
are at nutritional risk solely because of homelessness or migrancy in
Priority IV; children who are at nutritional risk solely because of
homelessness or migrancy in Priority V; and postpartum women who are at
nutritional risk solely because of homelessness or migrancy in Priority
VI, OR, the State agency may place pregnant, breastfeeding or postpartum
women, infants, and children who are at nutritional risk solely because
of
[[Page 335]]
homelessness or migrancy in Priority VII.
(i) Priority I. Pregnant women, breastfeeding women and infants at
nutritional risk as demonstrated by hematological or anthropometric
measurements, or other documented nutritionally related medical
conditions which demonstrate the need for supplemental foods.
(ii) Priority II. Except those infants who qualify for Priority I,
infant up to six months of age of Program participants who participated
during pregnancy, and infants up to six months of age born of women who
were not Program participants during pregnancy but whose medical records
document that they were at nutritional risk during pregnancy due to
nutritional conditions detectable by biochemical or anthropometric
measurements or other documented nutritionally related medical
conditions which demonstrated the person's need for supplemental foods.
(iii) Priority III. Children at nutritional risk as demonstrated by
hematological or anthropometric measurements or other documented medical
conditions which demonstrate the child's need for supplemental foods.
(iv) Priority IV. Pregnant women, breastfeeding women, and infants
at nutritional risk because of an inadequate dietary pattern.
(v) Priority V. Children at nutritional risk because of an
inadequate dietary pattern.
(vi) Priority VI. Postpartum women at nutritional risk.
(vii) Priority VII. Individuals certified for WIC solely due to
homelessness or migrancy and, at State agency option, and in accordance
with the provisions of paragraph (e)(1)(iii) of this section, previously
certified participants who might regress in nutritional status without
continued provision of supplemental foods.
(f) Processing standards. The local agencies shall process
applicants within the following timeframes:
(1) Waiting lists. When the local agency is serving its maximum
caseload, the local agency shall maintain a waiting list of individuals
who visit the local agency to express interest in receiving Program
benefits and who are likely to be served. However, in no case shall an
applicant who requests placement on the waiting list be denied
inclusion. State agencies may establish a policy which permits or
requires local agencies to accept telephone requests for placement on
the waiting list. The waiting list shall include the person's name,
address or phone number, status (e.g., pregnant, breastfeeding, age of
applicant), and the date he or she was placed on the waiting list.
Individuals shall be notified of their placement on a waiting list
within 20 days after they visit the local agency during clinic office
hours to request Program benefits. For those State agencies establishing
procedures to accept telephone requests for placement on a waiting list,
individuals shall be notified of their placement on a waiting list
within 20 days after contacting the local agency by phone. The competent
professional authority shall apply the participant priority system as
specified in paragraph (e)(4) of this section to the waiting list to
ensure that the highest priority persons become Program participants
first when caseload slots become available.
(2) Timeframes for processing applicants. (i) When the local agency
is not serving its maximum caseload, the local agency shall accept
applications, make eligibility determinations, notify the applicants of
the decisions made and, if the applicants are to be enrolled, issue food
or food instruments. All of these actions shall be accomplished within
the timeframes set forth below.
(ii) The processing timeframes shall begin when the individual
visits the local agency during clinic office hours to make an oral or
written request for Program benefits. To ensure that accurate records
are kept of the date of such requests, the local agency shall, at the
time of each request, record the applicant's name, address and the date.
The remainder of the information necessary to determine eligibility
shall be obtained by the time of certification. Medical data taken prior
to certification may be used as provided in paragraph (g)(4) of this
section.
(iii) The local agency shall act on applications within the
following timeframes:
[[Page 336]]
(A) Special nutritional risk applicants shall be notified of their
eligibility or ineligibility within 10 days of the date of the first
request for Program benefits; except that State agencies may provide an
extension of the notification period to a maximum of 15 days for those
local agencies which make written request, including a justification of
the need for an extension. The State agency shall establish criteria for
identifying categories of persons at special nutritional risk who
require expedited services. At a minimum, however, these categories
shall include pregnant women eligible as Priority I participants, and
migrant farmworkers and their family members who soon plan to leave the
jurisdiction of the local agency.
(B) All other applicants shall be notified of their eligibility or
ineligibility within 20 days of the date of the first request for
Program benefits.
(iv) Each local agency using a retail purchase system shall issue a
food instrument(s) to the participant at the same time as notification
of certification. Such food instrument(s) shall provide benefits for the
current month or the remaining portion thereof and shall be redeemable
immediately upon receipt by the participant. Local agencies may mail the
initial food instrument(s) with the notification of certification to
those participants who meet the criteria for the receipt of food
instruments through the mail, as provided in Sec. 246.12(r)(4).
(v) Each local agency with a direct distribution or home delivery
system shall issue the supplemental foods to the participant within 10
days of issuing the notification of certification.
(g) Certification periods. (1) Program benefits shall be based upon
certifications established in accordance with the following timeframes:
(i) Pregnant women shall be certified for the duration of their
pregnancy and for up to six weeks postpartum.
(ii) Postpartum women shall be certified for up to six months
postpartum.
(iii) Breastfeeding women shall be certified at intervals of
approximately six months and ending with the breastfed infant's first
birthday.
(iv) Infants shall be certified at intervals of approximately six
months, except that the State agency may permit local agencies under its
jurisdiction to certify infants under six months of age for a period
extending up to the first birthday provided the quality and
accessibility of health care services are not diminished.
(v) Children shall be certified at intervals of approximately six
months and ending with the end of the month in which a child reaches the
fifth birthday.
(2) The State agency may authorize local agencies under its
jurisdiction to establish shorter certification periods than outlined in
paragraph (g)(1) of this section on a case-by-case basis. If the State
agency exercises this option, it shall issue guidance for use by local
agencies in establishing the shorter periods.
(3) In cases where there is difficulty in appointment scheduling for
persons referenced in paragraphs (g)(1) (iii), (iv) and (v) of this
section, the certification period may be shortened or extended by a
period not to exceed 30 days.
(h) Actions affecting participation in mid-certification. (1) The
State agency shall ensure that local agencies disqualify an individual
during a certification period if, on the basis of a reassessment of
Program eligibility status, the individual is determined ineligible;
provided, however, that an individual determined adjunctively income
eligible under paragraph (d)(2)(vi)(A) (1) or (2) of this section or
income eligible under paragraph (d)(2)(vi)(B) of this section is not
disqualified solely on the basis of a determination they no longer
participate in TANF, Medicaid, Food Stamps, or another qualified State-
administered program or are no longer a member of a family which
contains an TANF recipient or a pregnant woman or an infant receiving
Medicaid. The State agency shall ensure that local agencies disqualify
such an individual during a certification period, if on the basis of a
reassessment of Program eligibility, the individual is no longer deemed
income eligible under paragraph (d)(2)(vi) (A) or (B) of this section
and does not meet the income eligibility requirements of paragraph
(d)(1) of this section. The State agency
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may authorize local agencies to disqualify an individual during the
certification period for the following reasons:
(i) Participant abuse, including, but not limited to the infractions
listed in the definition of Participant violation in Sec. 246.2; or
(ii) Failure to obtain food instruments or supplemental foods for a
number of consecutive months, as specified by the State agency,
evidenced by indicators such as failure to pick up supplemental foods or
food instruments, nonreceipt of food instruments as evidenced by return
of mailed instruments, or failure to have an electronic benefit transfer
card revalidated to authorize the purchase of supplemental foods.
(2) If a State agency experiences funding shortages, it may be
necessary to discontinue Program benefits to a number of certified
participants. Such action may be taken only after the State agency has
explored alternative actions. If taken, the action should affect the
least possible number of participants and should affect participants
whose nutritional and health status would be least impaired by
withdrawal of Program benefits. The State may discontinue benefits by--
(i) Disqualifying a group of participants; and/or
(ii) Withholding benefits of a group with the expectation of
providing benefits again when funds are available.
(3) When a State agency elects to discontinue benefits to a number
of certified participants due to insufficient funds for a period of
time, it shall not enroll new participants during that period.
(i) Certification forms. All certification data for each person
certified shall be recorded on a form (or forms) which are provided by
the State agency. The information on the forms shall include--
(1) Name and address;
(2) Date of initial visit to apply for participation;
(3) An indication of whether the applicant was physically present at
certification and, if not, the reason why an exception was granted or a
copy of the document(s) in the file which explains the reason for the
exception;
(4) A description of the document(s) used to determine residency and
identity or a copy of the document(s) used or the applicant's written
statement when no documentation exists;
(5) Information regarding income eligibility for the Program as
specified in paragraph (d) of this section as follows:
(i) A description of the document(s) used to determine income
eligibility or a copy of the document(s) in the file;
(ii) An indication that no documentation is available and the
reason(s) why or a copy of the applicant's written statement explaining
such circumstances; or
(iii) An indication that the applicant has no income.
(6) The date of certification and the date nutritional risk data
were taken if different from the date of certification;
(7) Height or length, weight, and hematological test results;
(8) The specific nutritional risk conditions which established
eligibility for the supplemental foods. Documentation should include
health history when appropriate to the nutritional risk condition, with
the applicant's or applicant's parent's or caretaker's consent;
(9) The signature and title of the competent professional authority
making the nutritional risk determination, and, if different, the
signature and title of the administrative person responsible for
determining income eligibility under the Program; and
(10) The following statement with a space for the signature of the
applicant, parent, or caretake to sign after reading or being read the
following statement:
I have been advised of my rights and obligations under the Program.
I certify that the information I have provided for my eligibility
determination is correct, to the best of my knowledge. This
certification form is being submitted in connection with the receipt of
Federal assistance. Program officials may verify information on this
form. I understand that intentionally making a false or misleading
statement or intentionally misrepresenting, concealing, or withholding
facts may result in paying the State agency, in cash, the value of the
food benefits improperly issued to me and may subject me to civil or
criminal prosecution under State and Federal law.
[[Page 338]]
(11) In States exercising the authority to disclose information
pursuant to Sec. 246.26(d)(2), a statement, to be added to the
statement required under paragraph (i)(8) of this section, acknowledging
that the chief State health officer (or in the case of Indian State
agencies, the governing authority) may authorize disclosure of
information provided by the applicant or participant to representatives
of public organizations, designated by such chief State officer or
governing authority, which administer health or welfare programs that
serve persons categorically eligible for the WIC Program. This statement
shall also indicate that such information can be used by the recipient
organizations only to determine the eligibility of WIC applicants and
participants for programs administered by such organizations, and to
conduct outreach for such programs.
(j) Notification of participant rights and responsibilities. In
order to inform applicants and participants or their parents or
caretakers of Program rights and responsibilities, the following
information shall be provided. Where a significant number or proportion
of the population eligible to be served needs the information in a
language other than English, reasonable steps shall be taken to provide
the information in appropriate languages to such persons, considering
the scope of the Program and the size and concentration of such
population.
(1) During the certification procedure, every Program applicant,
parent or caretaker shall be informed of the illegality of dual
participation.
(2) At the time of certification, each Program participant, parent
or caretaker shall read, or have read to him or her, the statement
provided in paragraph (i)(8) of this section and the following
sentences:
(i) ``Standards for eligibility and participation in the WIC Program
are the same for everyone, regardless of race, color, national origin,
age, handicap, or sex.''
(ii) ``You may appeal any decision made by the local agency
regarding your eligibility for the Program.''
(iii) ``The local agency will make health services and nutrition
education available to you, and you are encouraged to participate in
these services.''
(3) If the State agency implements the policy of disqualifying a
participant for not picking up supplemental foods or food instruments in
accordance with paragraph (h)(1)(ii) of this section, it shall provide
notice of this policy and of the importance of regularly picking up food
instruments or supplemental foods to each participant, parent or
caretaker at the time of each certification.
(4) At least during the initial certification visit, each
participant, parent or caretaker shall receive an explanation of how the
local food delivery system operates and shall be advised of the types of
health services available, where they are located, how they may be
obtained and why they may be useful.
(5) Persons found ineligible for the Program during a certification
visit shall be advised in writing of the ineligibility, of the reasons
for the ineligibility, and of the right to a fair hearing. The reasons
for ineligibility shall be properly documented and shall be retained on
file at the local agency.
(6) A person who is about to be suspended or disqualified from
program participation at any time during the certification period shall
be advised in writing not less than 15 days before the suspension or
disqualification. Such notification shall include the reasons for this
action, and the participant's right to a fair hearing. Further, such
notification need not be provided to persons who will be disqualified
for not picking up supplemental foods or food instruments in accordance
with paragraph (h)(1)(ii) of this section.
(7) When a State or local agency pursues collection of a claim
pursuant to Sec. 246.23(c) against an individual who has been
improperly issued benefits, the person shall be advised in writing of
the reason(s) for the claim, the value of the improperly issued benefits
which must be repaid, and of the right to a fair hearing.
(8) Each participant, parent or caretaker shall be notified not less
than 15 days before the expiration of each certification period that
certification for the Program is about to expire.
[[Page 339]]
(9) If a State agency must suspend or terminate benefits to any
participant during the participant's certification period due to a
shortage of funds for the Program, it shall issue a notice to such
participant in advance, as stipulated in paragraph (j)(6) of this
section.
(k) Transfer of certification. (1) Each State agency shall ensure
issuance of a Verification of Certification card to every participant
who is a member of a family in which there is a migrant farmworker or
any other participant who is likely to be relocating during the
certification period. Certifying local agencies shall ensure that
Verification of Certification cards are fully completed.
(2) The State agency shall require the receiving local agency to
accept Verification of Certification cards from participants, including
participants who are migrant farmworkers or members of their families,
who have been participating in the Program in another local agency
within or outside of the jurisdiction of the State agency. A person with
a valid Verification of Certification card shall not be denied
participation in the receiving State because the person does not meet
that State's particular eligibility criteria.
(3) The Verification of Certification card is valid until the
certification period expires, and shall be accepted as proof of
eligibility for Program benefits. If the receiving local agency has
waiting lists for participation, the transferring participant shall be
placed on the list ahead of all waiting applicants.
(4) The Verification of Certification card shall include the name of
the participant, the date the certification was performed, the date
income eligibility was last determined, the nutritional risk condition
of the participant, the date the certification period expires, the
signature and printed or typed name of the certifying local agency
official, the name and address of the certifying local agency and an
identification number or some other means of accountability. The
Verification of Certification card shall be uniform throughout the
jurisdiction of the State agency.
(l) Dual participation. (1) The State agency is responsible for the
following:
(i) In conjunction with WIC local agencies, the prevention and
identification of dual participation within each local agency and
between local agencies under the State agency's jurisdiction, including
actions to identify suspected instances of dual participation at least
semiannually. The State or local agency must take follow-up action
within 120 days of detecting instances of suspected dual participation;
(ii) In areas where a local agency serves the same population as an
Indian State agency or a CSFP agency, and in areas where geographical or
other factors make it likely that participants travel regularly between
contiguous local service areas located across State agency borders,
entering into an agreement with the other agency for the detection and
prevention of dual participation. The agreement must be made in writing
and included in the State Plan;
(iii) Immediate termination from participation in one of the
programs or clinics for participants found in violation due to dual
participation; and
(iv) In cases of dual participation resulting from intentional
misrepresentation, the collection of improperly issued benefits in
accordance with Sec. 246.23(c)(1) and disqualification from both
programs in accordance with Sec. 246.12(u)(2).
(2) At certification, the State or local agency must require each
applicant to present proof of residency (i.e., location or address where
the applicant routinely lives or spends the night) and proof of
identity. The State or local agency must also check the identity of
participants, or in the case of infants or children, the identity of the
parent or guardian, or proxies when issuing food or food instruments.
The State agency may authorize the certification of applicants when no
proof of residency or identity exists (such as when an applicant or an
applicant's parent is a victim of theft, loss, or disaster, a homeless
individual, or a migrant farmworker). In these cases, the State or local
agency must require the applicant to confirm in writing his/her
residency or identity. Further, an individual residing in a remote
Indian or Native village or an individual served by an Indian tribal
organization and
[[Page 340]]
residing on a reservation or pueblo may establish proof of residency by
providing the State agency their mailing address and the name of the
remote Indian or Native village.
(m) Certification without charge. The certification procedure shall
be performed at no cost to the applicant.
(n) Certification of persons in homeless facilities and
institutions. (1) Pregnant, breastfeeding, and postpartum women, infants
or children who meet the requirements of paragraph (c) of this section,
and who reside in a homeless facility, shall be considered eligible for
the Program and shall be treated equally with all other eligible
applicants at the local agency where they apply for WIC benefits,
Provided that: the State or local agency has taken reasonable steps to:
(i) Establish, to the extent practicable, that the homeless facility
meets the following conditions with respect to resident WIC
participants:
(A) The homeless facility does not accrue financial or in-kind
benefit from a person's participation in the Program, e.g., by reducing
its expenditures for food service because its residents are receiving
WIC foods;
(B) Foods provided by the WIC Program are not subsumed into a
communal food service, but are available exclusively to the WIC
participant for whom they were issued;
(C) The homeless facility places no constraints on the ability of
the participant to partake of the supplemental foods and nutrition
education available under the Program;
(ii) Contact the homeless facility periodically to ensure continued
compliance with these conditions; and
(iii) Request the homeless facility to notify the State or local
agency if it ceases to meet any of these conditions.
(2) The State agency may authorize or require local agencies to make
the Program available to applicants who meet the requirements of
paragraph (c) of this section, but who reside in institutions which meet
the conditions of paragraphs (n)(1)(i)(A)-(C) of this section with
respect to resident WIC participants.
(3) The State or local agency shall attempt to establish to the best
of its ability,whether a homeless facility or institution complies with
the conditions of paragraphs (n)(1)(i) (A)-(C) of this section with
respect to WIC participants. If caseload slots are available, full
certification periods shall be provided to the following:
(i) Participants who are residents of a homeless facility or
institution which has been found to be in compliance with the conditions
of paragraph (n)(1)(i)(A)-(C) of this section;
(ii) Participants who are residents of a homeless facility or
institution whose compliance with the conditions of paragraphs
(n)(1)(i)(A)-(C) of this section has not yet been established; and
(iii) Participants for whom no other shelter alternative is
available in the local agency's service delivery area.
(4) If a homeless facility or institution has been determined to be
noncompliant during the course of a participant's initial certification
period, participants applying for continued benefits may be certified
again, but the State agency shall discontinue issuance of WIC foods,
except infant formula, to the participant in such accommodation until
the accommodation's compliance is achieved or alternative shelter
arrangements are made. If certified, such participants shall continue to
be eligible to receive all other WIC benefits, such as nutrition
education and health care referral services.
(5) The State agency shall continue to the end of their
certification periods the participation of residents of a homeless
facility or institution which ceases to comply with the conditions of
paragraphs (n)(1)(i)(A)-(C) of this section.
(6) As soon as the State or local agency determines that a homeless
facility/institution does not meet the conditions of paragraphs
(n)(1)(i) (A)-(C) of this section, it shall refer all participants using
such accommodation to any other accommodations in the area which meet
these conditions.
(o) Drug and other harmful substance abuse screening. When a State
agency determines that screening is necessary to fulfill the referral
requirements in this part, the State agency must require screening for
the use of drugs and
[[Page 341]]
other harmful substances. When such screening is required, it shall:
(1) Be limited to the extent the State agency deems necessary to
fulfill the referral requirement of Sec. 246.4(a)(8) of this part and
the drug and other harmful substance abuse information requirement of
Sec. 246.11(a)(3) of this part; and
(2) Be integrated into certification process as part of the medical
or nutritional assessment.
(p) Are applicants required to be physically present at
certification?--(1) In general. The State or local agency must require
all applicants to be physically present at each WIC certification.
(2) Exceptions.--(i) Disabilities. The State or local agency must
grant an exception to applicants who are qualified individuals with
disabilities and are unable to be physically present at the WIC clinic
because of their disabilities or applicants whose parents or caretakers
are individuals with disabilities that meet this standard. Examples of
such situations include:
(A) A medical condition that necessitates the use of medical
equipment that is not easily transportable;
(B) A medical condition that requires confinement to bed rest; and
(C) A serious illness that may be exacerbated by coming in to the
WIC clinic.
(ii) Receiving ongoing health care. The State agency may exempt from
the physical presence requirement, if being physically present would
pose an unreasonable barrier, an infant or child who was present at his/
her initial WIC certification and has documented ongoing health care
from a health care provider other than the WIC local agency.
(iii) Working parents or caretakers. The State agency may exempt
from the physical presence requirement an infant or child who was
present at his/her initial WIC certification and was present at a WIC
certification or recertification determination within the 1-year period
ending on the date of the most recent certification or recertification
determination and is under the care of one or more working parents or
one or more primary working caretakers whose working status presents a
barrier to bringing the infant or child in to the WIC clinic.
(q) Certification of qualified aliens. In those cases where a person
sponsors a qualified alien, (as the term is defined in the Immigration
and Nationality Laws (8 U.S.C.1101 et seq.)), i.e., signs an affidavit
of support, the sponsor's income, including the income of the sponsor's
spouse, shall not be counted in determining the income eligibility of
the qualified alien except when the alien is a member of the sponsor's
family or economic unit. Sponsors of qualified aliens are not required
to reimburse the State or local agency or the Federal government for WIC
Program benefits provided to sponsored aliens. Further, qualified aliens
are eligible for the WIC Program without regard to the length of time in
the qualifying status.
[50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21236, June 4, 1987; 53
FR 35301, Sep. 13, 1988; 54 FR 51295, Dec. 14, 1989; 55 FR 3387, Feb. 1,
1990; 57 FR 34506, Aug. 5, 1992; 58 FR 11506, Feb. 26, 1993; 59 FR
11500, Mar. 11, 1994; 60 FR 19490, Apr. 19, 1995; 63 FR 63974, Nov. 18,
1998; 64 FR 70177, Dec. 16, 1999; 65 FR 3378, Jan. 21, 2000; 65 FR
53527, Sept. 5, 2000; 65 FR 77249, Dec. 11, 2000; 65 FR 83278, Dec. 29,
2000; 67 FR 66304, Oct. 31, 2002]
Sec. 246.8 Nondiscrimination.
(a) Civil rights requirements. The State agency shall comply with
the requirements of title VI of the Civil Rights Act of 1964, title IX
of the Education Amendments of 1972, section 504 of the Rehabilitation
Act of 1973, the Age Discrimination Act of 1975, Department of
Agriculture regulations on nondiscrimination (7 CFR parts 15, 15a and
15b), and FNS instructions to ensure that no person shall, on the
grounds of race, color, national origin, age, sex or handicap, be
excluded from participation in, be denied benefits of, or be otherwise
subjected to discrimination under the Program. Compliance with title VI
of the Civil Rights Act of 1964, title IX of the Education Amendments of
1972, Section 504 of the Rehabilitation Act of 1973, the Age
Discrimination Act of 1975, and regulations and instructions issued
thereunder shall include, but not be limited to:
(1) Notification to the public of the nondiscrimination policy and
complaint rights of participants and potentially eligible persons;
[[Page 342]]
(2) Review and monitoring activity to ensure Program compliance with
the nondiscrimination laws and regulations;
(3) Collection and reporting of racial and ethnic participation data
as required by title VI of the Civil Rights Act of 1964, which prohibits
discrimination in federally assisted programs on the basis of race,
color, or national origin; and
(4) Establishment of grievance procedures for handling complaints
based on sex and handicap.
(b) Complaints. Persons seeking to file discrimination complaints
may file them either with the Secretary of Agriculture, or the Director,
Office of Equal Opportunity, USDA, Washington, DC 20250 or with the
Office established by the State agency to handle discrimination
grievances or complaints. All complaints received by State or local
agencies which allege discrimination based on race, color, national
origin, or age shall be referred to the Secretary of Agriculture or
Director, Office of Equal Opportunity. A State or local agency may
process complaints which allege discrimination based on sex or handicap
if grievance procedures are in place.
(c) Non-English materials. Where a significant number or proportion
of the population eligible to be served needs service or information in
a language other than English in order effectively to be informed of or
to participate in the Program, the State agency shall take reasonable
steps considering the size and concentration of such population, to
provide information in appropriate languages to such persons. This
requirement applies with regard to required Program information except
certification forms which are used only by local agency staff. The State
agency shall also ensure that all rights and responsibilities listed on
the certification form are read to these applicants in the appropriate
language.
Sec. 246.9 Fair hearing procedures for participants.
(a) Availability of hearings. The State agency shall provide a
hearing procedure through which any individual may appeal a State or
local agency action which results in a claim against the individual for
repayment of the cash value of improperly issued benefits or results in
the individual's denial of participation or disqualification from the
Program.
(b) Hearing system. The State agency shall provide for either a
hearing at the State level or a hearing at the local level which permits
the individual to appeal a local agency decision to the State agency.
The State agency may adopt local level hearings in some areas, such as
those with large caseloads, and maintain only State level hearings in
other areas.
(c) Notification of appeal rights. At the time of a claim against an
individual for improperly issued benefits or at the time of
participation denial or of disqualification from the Program, the State
or local agency shall inform each individual in writing of the right to
a fair hearing, of the method by which a hearing may be requested, and
that any positions or arguments on behalf of the individual may be
presented personally or by a representative such as a relative, friend,
legal counsel or other spokesperson. Such notification is not required
at the expiration of a certification period.
(d) Request for hearing. A request for a hearing is defined as any
clear expression by the individual, the individual's parent, caretaker,
or other representative, that he or she desires an opportunity to
present his or her case to a higher authority. The State or local agency
shall not limit or interfere with the individual's freedom to request a
hearing.
(e) Time limit for request. The State or local agency shall provide
individuals a reasonable period of time to request fair hearings;
provided that, such time limit is not less than 60 days from the date
the agency mails or gives the applicant or participant the notice of
adverse action.
(f) Denial or dismissal of request. The State and local agencies
shall not deny or dismiss a request for a hearing unless--
(1) The request is not received within the time limit set by the
State agency in accordance with paragraph (e) of this section;
[[Page 343]]
(2) The request is withdrawn in writing by the appellant or a
representative of the appellant;
(3) The appellant or representative fails, without good cause, to
appear at the scheduled hearing; or
(4) The appellant has been denied participation by a previous
hearing and cannot provide evidence that circumstances relevant to
Program eligibility have changed in such a way as to justify a hearing.
(g) Continuation of benefits. Except for participants whose
certification period has expired, participants who appeal the
termination of benefits within the 15 days advance adverse notice period
provided by Sec. 246.7(j)(6) shall continue to receive Program benefits
until the hearing official reaches a decision or the certification
period expires, whichever occurs first. Applicants who are denied
benefits at initial certification or because of the expiration of their
certification may appeal the denial, but shall not receive benefits
while awaiting the hearing.
(h) Rules of procedure. State and local agencies shall process each
request for a hearing under uniform rules of procedure and shall makes
these rules of procedure available for public inspection and copying. At
a minimum, such rules shall include: The time limits for requesting and
conducting a hearing; all advance notice requirements; the rules of
conduct at the hearing; and the rights and responsibilities of the
appellant. The procedures shall not be unduly complex or legalistic.
(i) Hearing official. Hearings shall be conducted by an impartial
official who does not have any personal stake or involvement in the
decision and who was not directly involved in the initial determination
of the action being contested. The hearing official shall--
(1) Administer oaths or affirmations if required by the State;
(2) Ensure that all relevant issues are considered;
(3) Request, receive and make part of the hearing record all
evidence determined necessary to decide the issues being raised;
(4) Regulate the conduct and course of the hearing consistent with
due process to ensure an orderly hearing;
(5) Order, where relevant and necessary, an independent medical
assessment or professional evaluation from a source mutually
satisfactory to the appellant and the State agency; and
(6) Render a hearing decision which will resolve the dispute.
(j) Conduct of the hearing. The State or lcoal agency shall ensure
that the hearing is accessible to the appellant and is held within three
weeks from the date the State or local agency received the request for a
hearing. The State or local agency shall provide the appellant with a
minimum of 10 days advance written notice of the time and place of the
hearing and shall enclose an explanation of the hearing procedure with
the notice. The State or local agency shall also provide the appellant
or representative an opportunity to--
(1) Examine, prior to and during the hearing, the documents and
records presented to support the decision under appeal;
(2) Be assisted or represented by an attorney or other persons;
(3) Bring witnesses;
(4) Advance arguments without undue interference;
(5) Question or refute any testimony or evidence, including an
opportunity to confront and cross-examine adverse witnesses; and
(6) Submit evidence to establish all pertinent facts and
circumstances in the case.
(k) Fair hearing decisions. (1) Decisions of the hearing official
shall be based upon the application of appropriate Federal law,
regulations and policy as related to the facts of the case as
established in the hearing record. The verbatim transcript or recording
of testimony and exhibits, or an official report containing the
substance of what transpired at the hearing, together with all papers
and requests filed in the proceeding, constitute the exclusive record
for a final decision by hearing official. The State or local agency
shall retain the hearing record in accordance with Sec. 246.25 and make
these records available, for copying and inspection, to the appellant or
representative at any reasonable time.
(2) The decision by the hearing official shall summarize the facts
of the
[[Page 344]]
case, specify the reasons for the decision, and identify the supporting
evidence and the pertinent regulations or policy. The decision shall
become a part of the record.
(3) Within 45 days of the receipt of the request for the hearing,
the State or local agency shall notify the appellant or representative
in writing of the decision and the reasons for the decision in
accordance with paragraph (k)(2) of this section. If the decision is in
favor of the appellant and benefits were denied or discontinued,
benefits shall begin immediately. If the decision concerns
disqualification and is in favor of the agency, as soon as
administratively feasible, the local agency shall terminate any
continued benefits, as decided by the hearing official. If the decision
regarding repayment of benefits by the appellant is in favor of the
agency, the State or local agency shall resume its efforts to collect
the claim, even during pendency of an appeal of a local-level fair
hearing decision to the State agency. The appellant may appeal a local
hearing decision to the State agency, provided that the request for
appeal is made within 15 days of the mailing date of the hearing
decision notice. If the decision being appealed concerns
disqualification from the Program, the appellant shall not continue to
receive benefits while an appeal to the State agency of a decision
rendered on appeal at the local level is pending. The decision of a
hearing official at the local level is binding on the local agency and
the State agency unless it is appealed to the State level and overturned
by the State hearing official.
(4) The State and local agency shall make all hearing records and
decisions available for public inspection and copying; however, the
names and addresses of participants and other members of the public
shall be kept confidential.
(l) Judicial review. If a State level decision upholds the agency
action and the appellant expresses an interest in pursuing a higher
review of the decision, the State agency shall explain any further State
level review of the decision and any State level rehearing process. If
these are either unavailable or have been exhausted, the State agency
shall explain the right to pursue judicial review of the decision.
[50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21236, June 4, 1987; 59
FR 11503, Mar. 11, 1994]
Subpart D_Participant Benefits
Sec. 246.10 Supplemental foods.
(a) General. This section prescribes the requirements for providing
supplemental foods to participants.
(b) State agency responsibilities. State agencies shall--
(1) Identify foods which are acceptable for use under the Program in
accordance with the requirements of this section and provide to local
agencies a list of acceptable foods and their maximum monthly quantities
as specified in paragraph (c) of this section; and
(2) Ensure that local agencies--
(i) Make available at least one food from each group in each food
package listed in paragraph (c) of this section. However, this does not
mean that the local agency must provide each participant with a food
from each food group;
(ii) Make available to participants the supplemental foods, as
authorized in paragraph (c) of this section; and
(iii) Designate a competent professional authority to prescribe
types of supplemental foods in quantities appropriate for each
participant, taking into consideration the participant's age and dietary
needs. The amounts of supplemental foods shall not exceed the maximum
quantities specified in this section.
(c) Food packages. There are seven food packages available under the
Program which may be provided to participants. The authorized
supplemental foods shall be prescribed from food packages according to
the category and nutritional need of the participant. The food packages
are as follows:
Note: The metric units given are mathematical conversions. If
packaging practices change, the authorized food quantities will be
revised accordingly.
(1) Food Package I--Infants 0 Through 3 Months. (i) Iron-fortified
infant formula--requirements and routine issuance. Except as specified
in paragraphs (c)(1)(iii) through (c)(1)(v) of this section, local
agencies must issue a contract brand infant formula that meets
[[Page 345]]
the requirements of paragraph (c)(1)(i) of this section. The
supplemental food for this food package is an iron-fortified infant
formula that is not an exempt infant formula. The iron-fortified infant
formula must be nutritionally complete, not requiring the addition of
any ingredients other than water prior to being served in a liquid
state. It also must contain at least 10 milligrams of iron per liter at
standard dilution and supply 67 kilocalories per 100 milliliters (i.e.,
approximately 20 kilocalories per fluid ounce of infant formula) at
standard dilution. Medical documentation is not required for any
contract brand infant formula authorized for issuance by the State
agency, including the soy-based contract brand of infant formula.
However, the State agency may require medical documentation for any
contract brand infant formula even though it meets these requirements
and may decide that some contract brand infant formulas may not be
issued under any circumstances.
(ii) Physical forms. Local agencies must issue all WIC formulas (WIC
formula means all infant formulas, including exempt infant formulas, and
WIC-eligible medical foods) in concentrated liquid or powdered physical
forms. Ready-to-feed WIC formulas may be authorized when the competent
professional authority determines and documents that the participant's
household has an unsanitary or restricted water supply or poor
refrigeration, the participant or person caring for the participant may
have difficulty in correctly diluting concentrated forms or
reconstituting powdered forms, or the WIC formula is only available in
ready-to-feed form.
(iii) WIC formulas requiring medical documentation. Local agencies
may issue the following WIC formulas, but only with medical
documentation:
(A) Any contract brand infant formula that does not meet the
requirements of paragraph (c)(1)(i) of this section (e.g., low-iron,
low-calorie, or high-calorie infant formulas);
(B) Any non-contract brand infant formula (even if it meets the
requirements for an iron-fortified infant formula in paragraph (c)(1)(i)
of this section);
(C) Any exempt infant formula; and
(D) Any WIC-eligible medical food.
(iv) Religious eating patterns exception. Local agencies may issue a
non-contract brand infant formula that meets the requirements of
paragraph (c)(1)(i) of this section without medical documentation in
order to meet religious eating patterns. However, if the non-contract
brand infant formula does not meet the requirements of paragraph
(c)(1)(i) of this section, medical documentation must be provided.
Documentation of the basis of the substitution must be kept on file at
the local clinic.
(v) Medical documentation. (A) Determination. For purposes of this
food package, medical documentation means a determination by a licensed
health care professional authorized to write medical prescriptions under
State law. A licensed health care professional must make a medical
determination that an infant has a medical condition that dictates the
use of the following: a contract brand infant formula that does not meet
the requirements of paragraph (c)(1)(i) of this section; a non-contract
brand infant formula; an exempt infant formula; or a WIC-eligible
medical food. These conditions include, but are not limited to: those
that contraindicate the use of iron-fortified infant formula, metabolic
disorders, inborn errors of amino acid metabolism, gastrointestinal
disorders, malabsorption syndromes, and food allergies. Low-calorie WIC
formulas may not be issued solely for the purpose of managing body
weight.
(B) Technical requirements. Medical documentation must include the
brand name of the WIC formula prescribed; medical diagnosis warranting
the issuance of WIC formula; length of time the prescribed WIC formula
is medically required by the participant; and signature or name (if the
initial medical documentation was received by telephone) of the
requesting health care professional. Medical documentation may be
provided as an original written document, electronically, or by
facsimile. Medical documentation also may be provided by telephone to a
competent professional authority who must promptly document the
information which must be kept on file at the
[[Page 346]]
local clinic. However, this method may only be used until written
confirmation is received and only when absolutely necessary on an
individual participant basis to prevent undue hardship to a participant
or to prevent a delay in the provision of infant formula that would
place the participant at increased nutritional risk. The local clinic
must obtain written confirmation of the medical documentation within a
reasonable amount of time (i.e., one or two weeks' time) after accepting
the initial medical documentation by telephone. The written
documentation must be kept on file with the initial telephone
documentation.
(vi) Quantities and types of supplemental foods. The quantities and
types of supplemental foods prescribed shall be appropriate for the
participant taking into consideration the participant's age and dietary
needs. The maximum quantity of supplemental foods authorized per month
is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Formula:
Concentrated liquid formula......... 403 fluid oz. (11.9 L).
or
Powdered formula.................... May be substituted at the rate
of 8 lbs. (3.6 kg) per 403
fluid oz. (11.9 L) of
concentrated liquid formula.
or
Ready-to-feed formula............... May be substituted at the rate
of 26 fluid oz. (.8 L) per 13
fluid oz. (.4 L) of
concentrated liquid formula.
------------------------------------------------------------------------
(2) Food Package II--Infants 4 through 12 Months. (i) Infant formula
as specified in paragraphs (c)(1)(i) through (c)(1)(v) of this section.
(ii) Infant cereal which contains a minimum of 45 milligrams of iron
per 100 grams of dry cereal.
(iii) Single strength fruit juice which contains a minimum of 30
milligrams of vitamin C per 100 milliliters; or frozen concentrated
fruit juice which contains a minimum of 30 milligrams of vitamin C per
100 milliliters of reconstituted juice; or infant juice which contains a
minimum of 30 milligrams of vitamin C per 100 milliliters. Issuance
prior to the time when the infant can drink from a cup is discouraged.
The competent professional authority shall instruct the participant's
parent or guardian to feed the juice to the participant from a cup to
prevent ``bottle caries.''
(iv) The quantities and types of supplemental foods prescribed shall
be appropriate for the participant taking into consideration the
participant's age and dietary needs. The maximum quantity of
supplemental foods authorized per month is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Formula:
Concentrated liquid formula......... 403 fluid oz. (11.9 L).
or
Powdered formula.................... May be substituted at the rate
of 8 lb. (3.6 kg) per 403 fluid
oz. (11.9 L) of concentrated
liquid formula.
or
Ready-to-feed formula............... May be substituted at the rate
of 26 fluid oz. (.8 L) per 13
fluid oz. (.4 L) of
concentrated liquid formula.
Infant cereal......................... 24 oz. dry (.7 kg).
Juice: \1\
Single strength adult juice......... 92 fluid oz. (2.7 L).
or
Frozen concentrated juice........... 96 fluid oz. reconstituted (2.8
L).
or
Infant juice........................ May be substituted at the rate
of 63 fluid oz. (1.9 L) of
infant juice per 92 fluid oz.
(2.7 L) of single strength
adult juice.
------------------------------------------------------------------------
\1\ Combinations of single strength or frozen concentrated juice may be
issued as long as the total volume of juice does not exceed the amount
specified for single strength juice.
(3) Food Package III--Children/Women with Special Dietary Needs.
Local agencies may issue this food package to women and children only
with medical documentation. The supplemental foods in Food Package III
are set forth in paragraphs (c)(3)(i) through (c)(3)(iv) of this
section. For purposes of this food package, medical documentation means
a determination by a licensed health care professional authorized to
write medical prescriptions under State law that the child or woman has
a medical condition that dictates the use of a WIC formula (WIC formula
means all infant formulas, including exempt infant formulas, and WIC-
eligible medical foods) because the use of conventional foods is
precluded or restricted. These medical conditions include, but are not
limited to, metabolic disorders, inborn errors of amino acid metabolism,
gastrointestinal disorders, malabsorption syndromes and food allergies.
This food package may not be issued solely for the purpose of enhancing
nutrient intake or managing body
[[Page 347]]
weight. Medical documentation for WIC formulas must meet the technical
requirements described in paragraph (c)(1)(v)(B) of this section.
(i) WIC formulas (i.e., an infant formula, exempt infant formula, or
WIC-eligible medical food).
(ii) Cereal (hot or cold) which contains a minimum of 28 milligrams
of iron per 100 grams of dry cereal and not more than 21.2 grams of
sucrose and other sugars per 100 grams of dry cereal (6 grams per
ounce).
(iii) Single strength fruit juice or vegetable juice, or both, which
contains a minimum of 30 milligrams of vitamin C per 100 milliliters; or
frozen concentrated fruit or vegetable juice, or both, which contains a
minimum of 30 milligrams of vitiamin C per 100 milliliters of
reconstituted juice.
(iv) The quantities and types of supplemental foods prescribed shall
be appropriate for the participant taking into consideration the
participant's age and special dietary needs. The maximum quantity of
supplemental foods authorized per month is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Formula:
Concentrated liquid formula......... 403 fluid oz. (11.9 L).
Addition \1\........................ 52 fluid oz. (1.5 L).
or
Powdered formula.................... May be substituted at a rate of
8 lb. (3.6 kg) per 403 fluid
oz. (11.9 L) of concentrated
liquid formula.
Addition \1\........................ 1 lb. (.4 kg).
or
Ready-to-feed formula............... May be substituted at the rate
of 26 fluid oz. (.8 L) per 13
fluid oz. (.4 L) of
concentrated liquid formula.
Addition \1\........................ 104 fluid oz. (3.1 L).
Cereal (hot or cold).................. 36 oz. dry (1 kg).
Juice: \2\
Single strength juice............... 138 fluid oz. (4.1 L).
or
Frozen concentrated juice........... 144 fluid oz. reconstituted (4.3
L).
------------------------------------------------------------------------
\1\ Additional formula may be issued on an individual basis provided the
need is demonstrated and documented in the individual's certification
file by the competent professional authority.
\2\ Combinations of single strength and frozen concentrated juice may be
issued as long as the total volume does not exceed the amount
specified for single strength juice.
(4) Food Package IV--Children 1 to 5 Years. (i) Pasteurized fluid
whole milk which is flavored or unflavored and which contains 400
International Units of vitamin D per quart (.9 liter); or pasteurized
fluid skim or lowfat milk which is flavored or unflavored and which
contains 400 International Units of vitamin D and 2000 International
Units of vitamin A per fluid quart (.9 liter); or pasteurized cultured
buttermilk which contains 400 International units of vitamin D and 2000
International Units of vitamin A per fluid quart (.9 liter); or
evaporated whole milk which contains 400 International Units of vitamin
D per reconstituted quart (.9 liter); or evaporated skimmed milk which
contains 400 International Units of vitamin D and 2000 International
Units of vitamin A per reconstituted quart (.9 liter); or dry whole milk
which contains 400 International Units of vitamin D per reconstituted
quart (.9 liter); or nonfat or lowfat dry milk which contains 400
International Units of vitamin D and 2000 International Units of vitamin
A per reconstituted quart (.9 liter); or domestic cheese (pasteurized
process American, Monterey Jack, Colby, natural Cheddar, Swiss, Brick,
Muenster, Provolone, Mozzarella Part-Skim or Whole).
(ii) Adult cereal (hot or cold) which contains a minimum of 28
milligrams of iron per 100 grams of dry cereal and not more than 21.2
grams of sucrose and other sugars per 100 grams of dry cereal (6 grams
per ounce).
(iii) Single strength fruit juice or vegetable juice, or both, which
contains a minimum of 30 milligrams of vitamin C per 100 milliliters; or
frozen concentrated fruit or vegetable juice, or both, which contains a
minimum of 30 milligrams of vitamin C per 100 milliliters of
reconstituted juice.
(iv) Eggs or dried egg mix.
(v) Peanut butter or mature dry beans or peas, including but not
limited to, lentils, black, navy, kidney, garbanzo, soy, pinto, and mung
beans, crowder, cow, split and black-eyed peas.
(vi) The quantities and types of supplemental foods prescribed shall
be appropriate for the participant taking into consideration the
participant's age and dietary needs. The maximum quantity of
supplemental foods authorized per month is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Milk:
Fluid whole milk.................... 24 qt. (22.7 L).
[[Page 348]]
or
Fluid skim or low fat milk.......... May be substituted for fluid
whole milk on a quart-for-quart
(.9 L) basis.
or
Cultured buttermilk................. May be substituted for fluid
whole milk on a quart-for-quart
(.9 L) basis.
or
Evaporated whole milk............... May be substituted for fluid
whole milk at the rate of 13
fluid oz. (.4 L) per qt. (.9 L)
of fluid whole milk.
or
Evaporated skimmed milk............. May be substituted for fluid
whole milk at the rate of 13
fluid oz. (.4 L) per qt. (.9 L)
of fluid whole milk.
or
Dry whole milk...................... May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 3 qt. (2.8 L) of
fluid whole milk.
or
Nonfat or lowfat dry milk........... May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 5 qt. (4.7 L) of
fluid whole milk.
or
Cheese.............................. May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 3 qt. (2.8 L) of
fluid whole milk. 4 lbs. (1.8
kg) is the maximum amount which
may be substituted. 1
Eggs:
Eggs................................ 2 doz. or 2\1/2\ doz.
or
Dried egg mix....................... May be substituted at the rate
of 1.5 lb. (.7 kg) egg mix per
2 doz. fresh eggs or 2 lb. (.9
kg) egg mix per 2\1/2\ doz.
fresh eggs.
Cereals (hot or cold)................. 36 oz. dry (1 kg).
Juice:2
Single strength juice............... 276 fluid oz. (8.2 L).
or
Frozen concentrated juice........... 288 fluid oz. reconstituted (8.5
L).
Legumes:
Dry beans or peas................... 1 lb. (.4 kg).
or
Peanut butter....................... 18 oz. (.5 kg).
------------------------------------------------------------------------
\1\ Additional cheese may be issued on an individual basis in cases of
lactose intolerance, provided the need is documented in the
participant's file by the competent professional authority.
\2\ Combinations of single strength and frozen concentrated juice may be
issued as long as the total volume does not exceed the amount
specified for single strength juice.
(5) Food Package V--Pregnant and Breastfeeding Women (Basic). (i)
Pasteurized fluid whole milk which is flavored or unflavored and which
contains 400 International Units of Vitamin D per quart (.9 liter) or
pasteurized fluid skim or lowfat milk which is flavored or unflavored
and which contains 400 International Units of vitamin D and 2000
International Units of vitamin A per fluid quart (.9 liter); or
pasteurized cultured buttermilk which contains 400 International Units
of vitamin D and 2000 International Units of vitamin A per fluid quart
(.9 liter); or evaporated whole milk which contains 400 International
Units of vitamin D per reconstituted quart (.9 liter); or evaporated
skimmed milk which contains 400 International Units of vitamin D and
2000 International Units of vitamin A per reconstituted quart (.9
liter); or dry whole milk which contains 400 International Units of
vitamin D per reconstituted quart (.9 liter); or nonfat or lowfat dry
milk which contains 400 International Units of vitamin D and 2000
International Units of vitamin A per reconstituted quart (.9 liter); or
domestic cheese (pasteurized process American, Monterey Jack, Colby,
natural Cheddar, Swiss, Brick, Muenster, Provolone, Mozzarella Part-Skim
or Whole).
(ii) Adult cereal (hot or cold) which contains a minimum of 28
milligrams of iron per 100 grams of dry cereal and not more than 21.2
grams of sucrose and other sugars per 100 grams of dry cereal (6 grams
per ounce).
(iii) Single strength fruit juice or vegetable juice, or both, which
contains a minimum of 30 milligrams of vitamin C per 100 milliliters; or
frozen concentrated fruit or vegetable juice, or both, which contains a
minimum of 30 milligrams of vitamin C per 100 milliliters of
reconstituted juice.
(iv) Eggs or dried egg mix.
(v) Peanut butter or mature dry beans or peas, including but not
limited to lentils, black, navy, kidney, garbanzo, soy, pinto and mung
beans, crowder, cow, split and black-eyed peas.
(vi) The quantities and types of supplemental foods prescribed shall
be appropriate for the participant taking into consideration the
participant's age and dietary needs. The maximum quantity of
supplemental foods authorized per month is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Milk:
Fluid whole milk.................... 28 qt. (26.5 L).
or
Fluid skim or lowfat milk........... May be substituted for fluid
whole milk on a quart-for-quart
(.9 L) basis.
or
Cultured buttermilk................. May be substituted for fluid
whole milk on a quart-for-quart
(.9 L) basis.
[[Page 349]]
or
Evaporated whole milk............... May be substituted for fluid
whole milk at the rate of 13
fluid oz. (.4 L) per qt. (.9 L)
of fluid whole milk.
or
Evaporated skimmed milk............. May be substituted for fluid
whole milk at the rate of 13
fluid oz. (.4 L) per qt. (.9 L)
of fluid whole milk.
or
Dry whole milk...................... May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 3 qt. (2.8 L) of
fluid whole milk.
or
Nonfat or lowfat dry milk........... May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 5 qt. (4.7 L) of
fluid whole milk.
or
Cheese.............................. May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 3 qt. (2.8 L) of
fluid whole milk. 4 lbs. (1.8
kg) is the maximum amount which
may be substituted.1
Eggs:
Eggs................................ 2 doz. or 2\1/2\ doz.
or
Dried egg mix....................... May be substituted at the rate
of 1.5 lb. (.7 kg) egg mix per
2 doz. fresh eggs, or 2 lb. (.9
kg) egg mix per 2\1/2\ doz.
fresh eggs.
Cereals (hot or cold)................. 36 oz. dry (1 kg).
Juice:2
Single strength juice............... 276 fluid oz. (8.2 L).
or
Frozen, concentrated juice.......... 288 fluid oz. reconstituted (8.5
L).
Legumes:
Dry beans or peas................... 1 lb. (.4 kg).
or
Peanut butter....................... 18 oz. (.5 kg).
------------------------------------------------------------------------
1 Additional cheese may be issued on an individual basis in cases of
lactose intolerance, provided the need is documented in the
participant's file by the competent professional authority.
2 Combinations of single strength or frozen concentrated juice may be
issued as long as the total volume does not exceed the amount
specified for single strength juice.
(6) Food Package VI--Non-breastfeeding Postpartum Women. (i)
Pasteurized fluid whole milk which is flavored or unflavored and which
contains 400 International Units of vitamin D per quart (.9 liter); or
pasteurized fluid skim or lowfat milk which is flavored or unflavored
and which contains 400 International Units of vitamin D and 2000
International Units of vitamin A per fluid quart (.9 liter); or
pasteurized cultured buttermilk which contains 400 International Units
of vitamin D and 2000 International Units of vitamin A per fluid quart
(.9 liter); or evaporated whole milk which contains 400 International
Units of vitamin D per reconstituted quart (.9 liter); or evaporated
skimmed milk which contains 400 International Units of vitamin D and
2000 International Units of vitamin A per reconstituted quart (.9
liter); or dry whole milk which contains 400 International Units of
vitamin D per reconstituted quart (.9 liter); or nonfat or lowfat dry
milk which contains 400 International Units of Vitamin D and 2000
International Units of vitamin A per reconstituted quart (.9 liter); or
domestic cheese (pasteurized process American, Monterey Jack, Colby,
natural Cheddar, Swiss, Brick, Muenster, Provolone, Mozzarella Part-Skim
or Whole).
(ii) Cereal (hot or cold) which contains a minimum of 28 milligrams
of iron per 100 grams of dry cereal and not more than 21.1 grams of
sucrose and other sugars per 100 grams of dry cereal (6 grams per 1
ounce).
(iii) Single strength fruit juice or vegetable juice, or both, which
contains a minimum of 30 milligrams of vitamin C per 100 milliliters; or
concentrated fruit or vegetable juice, or both, which contains a minimum
of 30 milligrams of vitamin C per 100 milliliters of reconstituted
juice.
(iv) Eggs or dried egg mix.
(v) The quantities and types of supplemental foods prescribed shall
be appropriate for the participant taking into consideration the
participant's age and dietary needs. The maximum quantity of
supplemental foods authorized per month is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Milk:
Fluid whole milk.................... 24 qt. (22.7 L).
or
Fluid skim or lowfat milk........... May be substituted for fluid
whole milk on a quart-for-quart
(.9 L ) basis.
or
Cultured buttermilk................. May be substituted for fluid
whole milk on a quart-for-quart
(.9 L) basis.
or
Evaporated whole milk............... May be substituted for fluid
whole milk at the rate of 13
fluid oz. (.4 L) per qt. (.9 L)
of fluid whole milk.
or
Evaporated skimmed milk............. May be substituted for fluid
whole milk at the rate of 13
fluid oz. (.4 L) per qt. (.9 L)
of fluid whole milk.
or
Dry whole milk...................... May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 3 qt. (2.8 L) of
fluid whole milk.
or
Nonfat or lowfat dry milk........... May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 5 qt. (4.7 L) of
fluid whole milk.
[[Page 350]]
or
Cheese.............................. May be substituted for fluid
whole milk at the rate of 1 lb.
(.4 kg) per 3 qt. (2.8 L) of
fluid whole milk. 4 lbs. (1.8
kg) is the maximum amount which
may be substituted.1
Eggs:
Eggs................................ 2 doz. or 2\1/2\ doz.
or
Dried egg mix....................... May be substituted at the rate
of 1.5 lb. (.7 kg) egg mix per
2 doz. fresh eggs of 2 lb. (.9
kg) egg mix per 2\1/2\ doz.
fresh eggs.
Cereal (hot or cold).................. 36 oz. dry (1 kg).
Juice2
Single strength juice............... 184 fluid oz. (5.4 L).
or
Frozen concentrated juice........... 192 fluid oz. reconstituted (5.7
L).
------------------------------------------------------------------------
\1\ Additional cheese may be issued on an individual basis in cases of
lactose intolerance, provided the need is documented in the
participant's file by the competent professional authority.
\2\ Combinations of single strength or frozen concentrated juice may be
issued as long as the total volume does not exceed the amount
specified for single strength juice.
(7) Food Package VII--Breastfeeding Women (Enhanced). (i)
Pasteurized fluid whole milk which is flavored or unflavored and which
contains 400 International Units of Vitamin D per quart (.9 liter) or
pasteurized fluid skim or lowfat milk which is flavored or unflavored
and which contains 400 International Units of vitamin D and 2000
International Units of vitamin A per fluid quart (.9 liter); or
pasteurized cultured buttermilk which contains 400 International Units
of vitamin D and 2000 International Units of vitamin A per fluid quart
(.9 liter); or evaporated whole milk which contains 400 International
Units of vitamin D per reconstituted quart (.9 liter); or evaporated
skim milk which contains 400 International Units of vitamin D and 2000
International Units of vitamin A per reconstituted quart (.9 liter); or
dry whole milk which contains 400 International Units of vitamin D per
reconstituted quart (.9 liter); or nonfat or lowfat dry milk which
contains 400 International Units of vitamin D and 2000 International
Units of vitamin A per reconstituted quart (.9 liter); or domestic
cheese (pasteurized process American, Monterey Jack, Colby, natural
Cheddar, Swiss, Brick, Muenster, Provolone, Mozzarella Part-Skim or
Whole).
(ii) Domestic cheese (pasteurized process American, Monterey Jack,
Colby, natural Cheddar, Swiss, Brick, Muenster, Provolone, Mozzarella
Part-Skim or Whole).
(iii) Adult cereal (hot or cold) which contains a minimum of 28
milligrams of iron per 100 grams of dry cereal and not more than 21.2
grams of sucrose and other sugars per 100 grams of dry cereal (6 grams
per ounce).
(iv) Single strength fruit juice or vegetable juice, or both, which
contains a minimum of 30 milligrams of vitamin C per 100 milliliters; or
frozen concentrated fruit or vegetable juice, or both, which contains a
minimum of 30 milligrams of vitamin C per 100 milliliters of
reconstituted juice.
(v) Eggs or dried egg mix.
(vi) Peanut butter.
(vii) Mature dry beans or peas, including but not limited to
lentils, black, navy, kidney, garbanzo, soy, pinto and mung beans,
crowder, cow, split and black-eyed peas.
(viii) Tuna: Canned white, light, dark or blended tuna packed in
water or oil, including solid and solid pack; chunk, chunks and chunk
style; flake and flakes; and grated.
(ix) Carrots: Raw, canned or frozen. Mature raw; canned and frozen
carrots containing only the mature root of the carrot plant packed in
water.
(x) The quantities and types of supplemental foods prescribed shall
be appropriate for the participant taking into consideration the
participant's age and dietary needs. The maximum quantity of
supplemental foods authorized per month is as follows:
------------------------------------------------------------------------
Food Quantity
------------------------------------------------------------------------
Milk:
Fluid whole milk or...... 28 qt. (26.5 L).
Cheese or................ May be substituted for fluid whole milk
at the rate of 1 lb. (.4 kg) per 3 qt.
(2.8 L) of fluid whole milk. 4 lbs. (1.8
kg) is the maximum amount which may be
substituted.
Additional cheese may be issued on an
individual basis in cases of lactose
intolerance, provided the need is
documented in the participant's file by
the competent professional authority.
Fluid skim or lowfat milk May be substituted for fluid whole milk
or. on a quart-for-quart (.9 L) basis.
[[Page 351]]
Cultured buttermilk or... May be substituted for fluid whole milk
on a quart-for-quart (.9 L) basis.
Evaporated whole milk or. May be substituted for fluid whole milk
at the rate of 13 fluid oz. (.4 L) per
qt. (.9 L) of fluid whole milk.
Evaporated skimmed milk May be substituted for fluid whole milk
or. at the rate of 13 fluid oz. (.4 L) per
qt. (.9 L) of fluid whole milk.
Dry whole milk or........ May be substituted for fluid whole milk
at the rate of 1 lb. (.4 kg) per 3 qt.
(2.8 L) of fluid whole milk.
Nonfat or lowfat dry milk May be substituted for fluid whole milk
at the rate of 1 lb. (.4 kg) per 5 qt.
(4.7 L) of fluid whole milk.
Cheese:
Cheese................... 1 lb. (.4 kg).
Eggs:
Eggs or.................. 2 doz. or 2\1/2\ doz.
Dried egg mix............ May be substituted at the rate of 1.5 lb.
(.7 kg) egg mix per 2 doz. fresh eggs,
or 2 lb. (.9 kg) egg mix per 2\1/2\ doz.
fresh eggs.
Cereals:
Cereals (hot or cold).... 36 oz. dry (1 kg).
Juice:
Single strength juice or. 322 fluid oz. (9.6 L).
Frozen concentrated juice 336 fluid oz. reconstituted (10.0 L).
Combinations of single strength or frozen
concentrated juice may be issued as long
as the total volume does not exceed the
amount specified for single strength
juice.
Legumes:
Dry beans or peas and.... 1 lb. (.4 kg). May be substituted for
peanut butter at the rate of 1 lb. of
dry beans or peas per 18 oz. of peanut
butter.
Peanut butter............ 18 oz. (.5 kg). Peanut butter may not be
substituted for mature dry beans or peas
at any rate.
Fish:
Tuna..................... 26 oz. (.8 kg).
Vegetable:
Raw carrots or........... 2 lb. (.9 kg).
Frozen carrots or........ May be substituted for fresh at the rate
of 1 lb. frozen per 1 lb. fresh.
Canned carrots........... May be substituted for fresh at the rate
of 1 16-20 ounce can of carrots per 1
lb. fresh.
------------------------------------------------------------------------
(d) Use of commodity foods. (1) At the request of a State agency,
the Department will purchase commodity foods for the State agency using
funds allocated to the State agency. The commodity foods purchased and
made available to the State agency shall be equivalent to the foods
specified in paragraph (c) of this section.
(2) The State agency shall--
(i) Distribute the commodity foods to the local agency or
participant;
(ii) Ensure satisfactory storage conditions for the commodity foods,
including documentation of proper insurance; and
(iii) Ensure that there are proper storage facilities for commodity
foods.
(e) Plans for substitutions or eliminations. (1) The State agency
may submit to FNS a plan for substitution of food(s) acceptable for use
in the Program to allow for different cultural eating patterns and
substitution or elimination of a category of foods to accommodate the
special needs of homeless persons, and/or residents of institutions if
the State agency chooses to serve such persons under Sec. 246.7(m)(2)
of this part. The plan shall provide the State agency's justification,
including a specific explanation of the cultural eating pattern or the
homeless situation which requires the proposed alteration and other
information necessary for FNS to evaluate the plan as specified in
paragraph (e)(2) of this section for cultural substitutions and in
paragraph (e)(3) of this section for homeless substitutions or
eliminations.
(2) FNS will evaluate a State agency's plan for substitution of
foods for different cultural eating patterns based on the following
criteria:
(i) Any proposed substitute food must be nutritionally equivalent or
superior to the food it is intended to replace.
(ii) The proposed substitute must be widely available to
participants in the areas where the substitute is intended to be used.
(iii) The cost of the substitute must be equivalent to or less than
the cost of the food it is intended to replace.
[[Page 352]]
(3) FNS will evaluate a State agency's plan for substitution or
elimination of a food category to accommodate the special needs of a
specific group of homeless persons based on the justification presented
by the State agency documenting the need. Documentation shall illustrate
that all alternatives from within existing food packages have been
explored and shall include a specific description of the circumstances
of the homeless persons to be served that necessitate the proposed food
package alteration.
(4) FNS will make a determination on the proposed plan based on the
evaluation criteria specified in paragraph (e)(2) or (e)(3) of this
section, as appropriate. The State agency shall substitute or eliminate
foods only after receiving the written approval of FNS.
(f) Infant formula manufacturer registration. Infant formula
manufacturers supplying formula to the WIC Program shall register with
the Secretary of Health and Human Services under the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321 et seq.). Such manufacturers wishing to
bid for a State contract to supply infant formula to the program shall
first certify with the State health department that their formulas
comply with the Federal Food, Drug, and Cosmetic Act and regulations
issued pursuant to the Act.
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 51
FR 13208, Apr. 18, 1986; 51 FR 16155, May 1, 1986; 53 FR 25314, July 6,
1988; 54 FR 51295, Dec. 14, 1989; 57 FR 34506, Aug. 5, 1992; 57 FR
56240, Nov. 27, 1992; 65 FR 51223, Aug. 23, 2000]
Sec. 246.11 Nutrition education.
(a) General. (1) Nutrition education shall be considered a benefit
of the Program, and shall be made available at no cost to the
participant. Nutrition education shall be designed to be easily
understood by participants, and it shall bear a practical relationship
to participant nutritional needs, household situations, and cultural
preferences including information on how to select food for themselves
and their families. Nutrition education shall be thoroughly integrated
into participant health care plans, the delivery of supplemental foods,
and other Program operations.
(2) The State agency shall ensure that nutrition education is made
available to all participants. Nutrition education may be provided
through the local agencies directly, or through arrangements made with
other agencies. At the time of certification, the local agency shall
stress the positive, long-term benefits of nutrition education and
encourage the participant to attend and participate in nutrition
education activities. However, individual participants shall not be
denied supplemental foods for failure to attend or participate in
nutrition education activities.
(3) As an integral part of nutrition education, the State agency
shall ensure that local agencies provide drug and other harmful
substance abuse information to all pregnant, postpartum, and
breastfeeding women and to parents or caretakers of infants and children
participating in the program. Drug and other harmful substance abuse
information may also be provided to pregnant, postpartum, and
breastfeeding women and to parents or caretakers of infants and children
participating in local agency services other than the Program.
(b) Goals. Nutrition education shall be designed to achieve the
following two broad goals:
(1) Stress the relationship between proper nutrition and good health
with special emphasis on the nutritional needs of pregnant, postpartum,
and breastfeeding women, infants and children under five years of age,
and raise awareness about the dangers of using drugs and other harmful
substances during pregnancy and while breastfeeding.
(2) Assist the individual who is at nutritional risk in achieving a
positive change in food habits, resulting in improved nutritional status
and in the prevention of nutrition-related problems through optimal use
of the supplemental foods and other nutritious foods. This is to be
taught in the context of the ethnic, cultural and geographic preferences
of the participants and with consideration for educational and
environmental limitations experienced by the participants.
[[Page 353]]
(c) State agency responsibilities. The State agency shall perform
the following activities in carrying out nutrition education
responsibilities:
(1) Develop and coordinate the nutrition education component of
Program operations with consideration of local agency plans, needs and
available nutrition education resources.
(2) Provide in-service training and technical assistance for
professional and para-professional personnel involved in providing
nutrition education to participants at local agencies. The State agency
shall also provide training on the promotion and management of
breastfeeding to staff at local agencies who will provide information
and assistance on this subject to participants.
(3) Identify or develop resources and educational materials for use
in local agencies, including breastfeeding promotion and instruction
materials, taking reasonable steps to include materials in languages
other than English in areas where a significant number or proportion of
the population needs the information in a language other than English,
considering the size and concentration of such population and, where
possible, the reading level of participants.
(4) Develop and implement procedures to ensure that nutrition
education is offered to all adult participants and to parents and
guardians of infant or child participants, as well as child
participants, whenever possible.
(5) Monitor local agency activities to ensure compliance with
provisions set forth in paragraphs (c)(8), (d), and (e) of this section.
(6) Establish standards for participant contacts that ensure
adequate nutrition education in accordance with paragraph (e) of this
section.
(7) Establish standards for breastfeeding promotion and support
which include, at a minimum, the following:
(i) A policy that creates a positive clinic environment which
endorses breastfeeding as the preferred method of infant feeding;
(ii) A requirement that each local agency designate a staff person
to coordinate breastfeeding promotion and support activities;
(iii) A requirement that each local agency incorporate task-
appropriate breastfeeding promotion and support training into
orientation programs for new staff involved in direct contact with WIC
clients; and
(iv) A plan to ensure that women have access to breastfeeding
promotion and support activities during the prenatal and postpartum
periods.
(d) Local agency responsibilities. Local agencies shall perform the
following activities in carrying out their nutrition education
responsibilities:
(1) Make nutrition education available or enter into an agreement
with another agency to make nutrition education available to all adult
participants, and to parents or caretakers of infant and child
participants, and whenever possible, to child participants. Nutrition
education may be provided through the use of individual or group
sessions. Educational materials designed for Program participants may be
utilized to provide education to pregnant, postpartum, and breastfeeding
women and to parents or caretakers of infants and children participating
in local agency services other than the program.
(2) Develop an annual local agency nutrition education plan
consistent with the State's nutrition education component of Program
operations and in accordance with this part and FNS guidelines. The
local agency shall submit its nutrition education plan to the State
agency by a date specified by the State agency.
(e) Participant contacts. (1) The nutrition education contacts shall
be made available through individual or group sessions which are
appropriate to the individual participant's nutritional needs. All
pregnant participants shall be encouraged to breastfeed unless
contraindicated for health reasons.
(2) During each six-month certification period, at least two
nutrition contacts shall be made available to all adult participants and
the parents or caretakers of infant and child participants, and wherever
possible, the child participants themselves.
(3) Nutrition education contacts shall be made available at a
quarterly rate, but not necessarily taking place within each quarter, to
parents or caretakers
[[Page 354]]
of infant participants certified for a period in excess of six months.
(4) The local agency shall document in each participant's
certification file that nutrition education has been given to the
participant in accordance with State agency standards, except that the
second or any subsequent nutrition education contact during a
certification period that is provided to a participant in a group
setting may be documented in a masterfile. Should a participant miss a
nutrition education appointment, the local agency shall, for purposes of
monitoring and further education efforts, document this fact in the
participant's file, or, at the local agency's discretion, in the case of
a second or subsequent missed contact where the nutrition education was
offered in a group setting, document this fact in a master file.
(5) An individual care plan shall be provided for a participant
based on the need for such plan as determined by the competent
professional authority, except that any participant, parent, or
caretaker shall receive such plan upon request.
(6) Contacts shall be designed to meet different cultural and
language needs of Program participants.
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 58
FR 11507, Feb. 26, 1993; 59 FR 11503, Mar. 11, 1994; 65 FR 53528, Sept.
5, 2000]
Subpart E_State Agency Provisions
Sec. 246.12 Food delivery systems.
(a) General. This section sets forth design and operational
requirements for food delivery systems. In recognition of emergent
electronic benefits transfer (EBT) technology, FNS may, on a case-by-
case basis, modify regulatory provisions to the extent FNS determines
the particular EBT system provides adequate safeguards that serve the
purpose of the provisions being modified.
(1) Management. The State agency is responsible for the fiscal
management of, and accountability for, food delivery systems under its
jurisdiction. The State agency may permit only authorized vendors, home
food delivery contractors, and direct distribution sites to accept food
instruments.
(2) Design. The State agency must design all food delivery systems
to be used by its local agencies.
(3) FNS oversight. FNS may, for a stated cause and by written
notice, require revision of a proposed or operating food delivery system
and will allow a reasonable time for the State agency to effect such a
revision.
(4) Part 3016. All contracts or agreements entered into by the State
or local agency for the management or operation of food delivery systems
must conform to the requirements of Part 3016 of this title.
(b) Uniform food delivery systems. The State agency may operate up
to three types of food delivery systems under its jurisdiction--retail,
home delivery, or direct distribution. Each system must be procedurally
uniform throughout the jurisdiction of the State agency and must ensure
adequate participant access to supplemental foods. When used, food
instruments must be uniform within each type of system.
(c) No charge for authorized supplemental foods. The State agency
must ensure that participants receive their authorized supplemental
foods free of charge.
(d) Compatibility of food delivery system. The State agency must
ensure that the food delivery system(s) selected is compatible with the
delivery of health and nutrition education services to participants.
(e) Retail food delivery systems: General. Retail food delivery
systems are systems in which participants, parents or caretakers of
infant and child participants, and proxies obtain authorized
supplemental foods by submitting a food instrument to an authorized
vendor.
(f) Retail food delivery systems: Food instrument requirements--(1)
General. State agencies using retail food delivery systems must use food
instruments that comply with the requirements of paragraph (f)(2) of
this section.
(2) Printed food instruments. Each printed food instrument must
clearly bear on its face the following information:
[[Page 355]]
(i) Authorized supplemental foods. The supplemental foods authorized
to be obtained with the food instrument;
(ii) First date of use. The first date on which the food instrument
may be used to obtain supplemental foods;
(iii) Last date of use. The last date on which the food instrument
may be used to obtain authorized supplemental foods. This date must be a
minimum of 30 days from the first date on which it may be used, except
for the participant's first month of issuance, when it may be the end of
the month or cycle for which the food instrument is valid. Rather than
entering a specific last date of use on each instrument, all instruments
may be printed with a notice that the participant must transact them
within a specified number of days after the first date on which the food
instrument may be used;
(iv) Redemption period. The date by which the vendor must submit the
food instrument for redemption. This date must be no more than 90 days
from the first date on which the food instrument may be used. If the
date is fewer than 90 days, then the State agency must ensure that the
allotted time provides the vendor sufficient time to submit the food
instrument for redemption without undue burden;
(v) Serial number. A unique and sequential serial number;
(vi) Purchase price. A space for the purchase price to be entered.
At the discretion of the State agency, a maximum price may be printed on
the food instrument that is higher than the expected purchase price of
the authorized supplemental foods for which it will be used, but that is
low enough to protect against potential loss of funds. When a maximum
price is printed on the food instrument, the space for the purchase
price must be clearly distinguishable from the maximum price. For
example, the words ``purchase price'' or ``actual amount of sale'' could
be printed larger and in a different area of the food instrument than
the maximum price; and
(vii) Signature space. A space where participants, parents or
caretakers of infant or child participants, or proxies must sign.
(3) Vendor identification. The State agency must implement
procedures to ensure each food instrument submitted for redemption can
be identified by the vendor that submitted the food instrument. Each
vendor operated by a single business entity must be identified
separately. The State agency may identify vendors by requiring that all
authorized vendors stamp their names and/or enter a vendor
identification number on all food instruments prior to submitting them
for redemption.
(g) Retail food delivery systems: Vendor authorization-- (1)
General. The State agency must authorize an appropriate number and
distribution of vendors in order to ensure the lowest practicable food
prices consistent with adequate participant access to supplemental foods
and to ensure effective State agency management, oversight, and review
of its authorized vendors.
(2) Vendor limiting criteria. The State agency may establish
criteria to limit the number of stores it authorizes. The State agency
must apply its limiting criteria consistently throughout its
jurisdiction. Any vendor limiting criteria used by the State agency must
be included in the State Plan in accordance with Sec. 246.4(a)(14)(ii).
(3) Vendor selection criteria. The State agency must develop and
implement criteria to select stores for authorization. The State agency
must apply its selection criteria consistently throughout its
jurisdiction. The State agency may reassess any authorized vendor at any
time during the vendor's agreement period using the vendor selection
criteria in effect at the time of the reassessment and must terminate
the agreements with those vendors that fail to meet them. The vendor
selection criteria must include the following categories and
requirements and must be included in the State Plan in accordance with
Sec. 246.4(a)(14)(ii).
(i) Minimum variety and quantity of supplemental foods. The State
agency must establish minimum requirements for the variety and quantity
of supplemental foods that a vendor applicant must stock to be
authorized. The State agency may not authorize a vendor applicant unless
it determines that the vendor applicant meets these minimums. The State
agency may establish different minimums for different vendor peer
groups.
[[Page 356]]
(ii) Business integrity. The State agency must consider the business
integrity of a vendor applicant. In determining the business integrity
of a vendor applicant, the State agency may rely solely on facts already
known to it and representations made by the vendor applicant on its
vendor application. The State agency is not required to establish a
formal system of background checks for vendor applicants. Unless denying
authorization of a vendor applicant would result in inadequate
participant access, the State agency may not authorize a vendor
applicant if during the last six years the vendor applicant or any of
the vendor applicant's current owners, officers, or managers have been
convicted of or had a civil judgment entered against them for any
activity indicating a lack of business integrity. Activities indicating
a lack of business integrity include fraud, antitrust violations,
embezzlement, theft, forgery, bribery, falsification or destruction of
records, making false statements, receiving stolen property, making
false claims, and obstruction of justice. The State agency may add other
types of convictions or civil judgments to this list.
(iii) Current Food Stamp Program disqualification or civil money
penalty for hardship. Unless denying authorization of a vendor applicant
would result in inadequate participant access, the State agency may not
authorize a vendor applicant that is currently disqualified from the
Food Stamp Program or that has been assessed a Food Stamp Program civil
money penalty for hardship and the disqualification period that would
otherwise have been imposed has not expired.
(4) Vendor selection criteria: competitive price. The State agency
must establish a vendor peer group system and distinct competitive price
criteria and allowable reimbursement levels for each peer group. The
State agency must use the competitive price criteria to evaluate the
prices a vendor applicant charges for supplemental foods as compared to
the prices charged by other vendor applicants and authorized vendors,
and must authorize vendors selected from among those that offer the
program the most competitive prices. The State agency must consider a
vendor applicant's shelf prices or the prices it bids for supplemental
foods, which may not exceed its shelf prices. In establishing
competitive price criteria and allowable reimbursement levels, the State
agency must consider participant access by geographic area.
(i) Vendors that meet the above-50-percent criterion. Vendors that
derive more than 50 percent of their annual food sales revenue from WIC
food instruments, and new vendor applicants expected to meet this
criterion under guidelines approved by FNS, are defined as above-50-
percent vendors. Each State agency annually must implement procedures
approved by FNS to identify authorized vendors and vendor applicants as
either above-50-percent vendors or regular vendors. The State agency
must receive FNS certification of its vendor cost containment system
under section 246.12(g)(4)(vi) prior to authorizing any above-50-percent
vendors. The State agency that chooses to authorize any above-50-percent
vendors:
(A) Must distinguish these vendors from other authorized vendors in
its peer group system or its alternative cost containment system
approved by FNS by establishing separate peer groups for above-50-
percent vendors or by placing above-50-percent vendors in peer groups
with other vendors and establishing distinct competitive price selection
criteria and allowable reimbursement levels for the above-50-percent
vendors;
(B) Must reassess the status of new vendors within six months after
authorization to determine whether or not the vendors are above-50-
percent vendors, and must take necessary follow-up action, such as
terminating vendor agreements or reassigning vendors to the appropriate
peer group;
(C) Must compare above-50-percent vendors' prices against the prices
of vendors that do not meet the above-50-percent criterion in
determining whether the above-50-percent vendors have competitive prices
and in establishing allowable reimbursement levels for such vendors; and
(D) Must ensure that the prices of above-50-percent vendors do not
inflate the competitive price criteria and allowable reimbursement
levels for the
[[Page 357]]
peer groups or result in higher total food costs if program participants
transact their food instruments at above-50-percent vendors rather than
at other vendors that do not meet the above-50-percent criterion. To
comply with this requirement, the State agency must compare the average
cost of each type of food instrument redeemed by above-50-percent
vendors against the average cost of the same type of food instrument
redeemed by regular vendors. The average cost per food instrument must
be weighted to reflect the relative proportion of food instruments
redeemed by each category of vendors in the peer group system. The State
agency must compute statewide average costs per food instrument at least
quarterly to monitor compliance with this requirement. If average
payments per food instrument for above-50-percent vendors exceed average
payments per food instrument to regular vendors, then the State agency
must take necessary action to ensure compliance, such as adjusting
payment levels, recouping excess payments, or terminating vendor
agreements with above-50-percent vendors whose prices are least
competitive and that are not needed to ensure participant access. Where
EBT systems are in use, it may be more appropriate to compare prices of
individual WIC food items to ensure that average payments to above-50-
percent vendors do not exceed average payments for the same food item to
comparable vendors. If FNS determines that a State agency has failed to
ensure that above-50-percent vendors do not result in higher costs to
the program than if participants transact their food instruments at
regular vendors, FNS will establish a claim against the State agency to
recover excess food funds expended and will require remedial action.
(ii) Implementing effective peer groups. The State agency's
methodology for establishing a vendor peer group system must include the
following:
(A) At least two criteria for establishing peer groups, one of which
must be a measure of geography, such as metropolitan or other
statistical areas that form distinct labor and products markets, unless
the State agency receives FNS approval to use a single criterion;
(B) Routine collection and monitoring of vendor shelf prices at
least every six months following authorization; and
(C) Assessment of the effectiveness of the peer groupings and
competitive price criteria at least every three years and modification,
as necessary, to enhance system performance. The State agency may change
a vendor's peer group whenever the State agency determines that
placement in an alternate peer group is warranted.
(iii) Subsequent price increases. The State agency must establish
procedures to ensure that a vendor selected for participation in the
program does not, subsequent to selection, increase prices to levels
that would make the vendor ineligible for authorization.
(iv) Exceptions to competitive price criteria. The State agency may
except from the competitive price criteria and allowable reimbursement
levels pharmacy vendors that supply only exempt infant formula and/or
WIC-eligible medical foods, and non-profit vendors for which more than
50 percent of their annual revenue from food sales consists of revenue
derived from WIC food instruments. A State agency that elects to exempt
non-profit vendors from competitive price criteria and/or allowable
reimbursements levels must notify FNS, in writing, at least 30 days
prior to the effective date of the exemption. The State agency's
notification must indicate the reason for the exemption, including
whether the vendor is needed to ensure participant access, why other
vendors that are subject to competitive price criteria and allowable
reimbursement levels cannot provide the required supplemental foods, the
benefits to the program of exempting the non-profit vendor from the
competitive price criteria and/or allowable reimbursement levels, the
criteria the State agency used to assess the competitiveness of the non-
profit vendor's prices, and how the State agency will determine the
reimbursement level for the non-profit vendor. This notification
requirement does not apply to State agency contracts and agreements with
non-profit health and/
[[Page 358]]
or human service agencies or organizations.
(v) Exemptions from the vendor peer group system requirement. With
prior written approval from FNS, a State agency may use a vendor cost
containment approach other than a peer group system if it meets certain
conditions. A State agency that obtains an exemption from the peer group
requirement still must establish competitive pricing criteria for vendor
selection and allowable reimbursement levels. An exemption from the peer
group requirement would remain in effect until the State agency no
longer meets the conditions on which the exemption was based, until FNS
revokes the exemption, or for three years, whichever occurs first.
During the period of the exemption, the State agency must provide
annually to FNS documentation that it either authorizes no above-50-
percent vendors, or that such vendors' redemptions continue to represent
less than five percent of total WIC redemptions, depending on the terms
of the exemption. The conditions for obtaining an exemption from the
vendor peer group system are as follows:
(A) The State agency chooses not to authorize any vendors that
derive more than 50 percent of their revenue from food sales from WIC
food instruments, and the State agency demonstrates to FNS that
establishing a vendor peer group system would be inconsistent with
efficient and effective operation of the program, or that its
alternative cost containment system would be as effective as a peer
group system; or
(B) The State agency determines that food instruments redeemed by
vendors that meet the above-50-percent criterion comprise less than five
percent of the total WIC redemptions in the State in the fiscal year
prior to a fiscal year in which the exemption is effective; and the
State agency demonstrates to FNS that its alternative vendor cost
containment system would be as effective as a vendor peer group system
and would not result in higher costs if program participants redeem food
instruments at vendors that meet the above-50-percent criterion rather
than at vendors that do not meet this criterion.
(vi) Cost containment certification. If a State agency elects to
authorize any above-50-percent vendors, the State agency must submit
information, in accordance with guidance provided by FNS, to demonstrate
that its competitive price criteria and allowable reimbursement levels
do not result in average payments per food instrument to these vendors
that are higher than average payments per food instrument to comparable
vendors that are not above-50-percent vendors. To calculate average
payments per food instrument, the State agency must include either all
food instruments redeemed by all authorized vendors or a representative
sample of the redeemed food instruments. The State agency must add the
redemption amounts for all redeemed food instruments of the same type
and divide the sum by the number of food instruments of that type. If
the State agency does not designate food instruments by type, it must
calculate the average payment for each distinct combination of foods
prescribed on the food instrument. The State agency may calculate
average payments per food instrument type for groups of vendors that
meet the above-50-percent criterion and comparable vendors, or the State
agency may calculate average payments for each food instrument type for
each vendor. State agencies with EBT systems must compare the average
cost of each WIC food purchased by participants at above-50-percent
vendors with the average cost of each food purchased from comparable
vendors. If FNS determines, based on its review of the information
provided by the State agency and any other relevant data, that the
requirements in this paragraph have been met, FNS will certify that the
State agency's competitive price criteria and allowable reimbursement
levels established for above-50-percent vendors do not result in higher
average payments per food instrument (or higher costs for each WIC food
item in EBT systems). If the State agency's methodology for establishing
competitive price criteria and allowable reimbursement levels fails to
meet the requirement of this section regarding average food instrument
payments to above-50-percent vendors, FNS will disapprove the State
[[Page 359]]
agency's request to authorize above-50-percent vendors. At least every
three years following initial certification, the State agency must
submit information which demonstrates that it continues to meet the
requirements of this section relative to average payments to above-50-
percent vendors. FNS may require annual updates of selected food
instrument redemption data.
(vii) Limitation on private rights of action. The competitive
pricing provisions of this paragraph do not create a private right of
action based on facts that arise from the impact or enforcement of these
provisions.
(5) On-site preauthorization visit. The State agency must conduct an
on-site visit prior to or at the time of a vendor's initial
authorization.
(6) Sale of store to circumvent WIC sanction. The State agency may
not authorize a vendor applicant if the State agency determines the
store has been sold by its previous owner in an attempt to circumvent a
WIC sanction. The State agency may consider such factors as whether the
store was sold to a relative by blood or marriage of the previous
owner(s) or sold to any individual or organization for less than its
fair market value.
(7) Impact on small businesses. The State agency is encouraged to
consider the impact of authorization decisions on small businesses.
(8) Application periods. The State agency may limit the periods
during which applications for vendor authorization will be accepted and
processed, except that applications must be accepted and processed at
least once every three years. The State agency must develop procedures
for processing vendor applications outside of its timeframes when it
determines there will be inadequate participant access unless additional
vendors are authorized.
(9) Data collection at authorization. At the time of application,
the State agency must collect the vendor applicant's Food Stamp Program
authorization number if the vendor applicant is authorized in that
program. In addition, the State agency must collect the vendor
applicant's current shelf prices for supplemental foods.
(h) Retail food delivery systems: Vendor agreements--(1) General.
(i) Entering into agreements. The State agency must enter into written
agreements with all authorized vendors. The agreements must be for a
period not to exceed three years. The agreement must be signed by a
representative who has legal authority to obligate the vendor and a
representative of the State agency. When the vendor representative is
obligating more than one vendor, the agreement must specify all vendors
covered by the agreement. When more than one vendor is specified in the
agreement, the State agency may add or delete an individual vendor
without affecting the remaining vendors. The State agency must require
vendors to reapply at the expiration of their agreements and must
provide vendors with not less than 15 days advance written notice of the
expiration of their agreements.
(ii) Delegation to local agencies. The State agency may delegate to
its local agencies the authority to sign vendor agreements if the State
agency indicates its intention to do so in its State Plan in accordance
with Sec. 246.4(a)(14)(iii). In such cases, the State agency must
provide supervision and instruction to ensure the uniformity and quality
of local agency activities.
(2) Standard vendor agreement. The State agency must use a standard
vendor agreement throughout its jurisdiction, although the State agency
may make exceptions to meet unique circumstances provided that it
documents the reasons for such exceptions.
(3) Vendor agreement provisions. The vendor agreement must contain
the following specifications, although the State agency may determine
the exact wording to be used:
(i) Acceptance of food instruments. The vendor may accept food
instruments only from participants, parents or caretakers of infant and
child participants, or proxies.
(ii) No substitutions, cash, credit, refunds, or exchanges. The
vendor may provide only the authorized supplemental foods listed on the
food instrument. The vendor may not provide unauthorized food items,
non-food items, cash, or credit (including rainchecks) in exchange for
food instruments. The
[[Page 360]]
vendor may not provide refunds or permit exchanges for authorized
supplemental foods obtained with food instruments, except for exchanges
of an identical authorized supplemental food item when the original
authorized supplemental food item is defective, spoiled, or has exceeded
its ``sell by,'' ``best if used by,'' or other date limiting the sale or
use of the food item. An identical authorized supplemental food item
means the exact brand and size as the original authorized supplemental
food item obtained and returned by the participant.
(iii) Treatment of participants, parents/caretakers, and proxies.
The vendor must offer program participants, parents or caretakers of
infant of child participants, and proxies the same courtesies offered to
other customers.
(iv) Time periods for transacting food instruments. The vendor may
accept a food instrument only within the specified time period.
(v) Purchase price on food instruments. The vendor must ensure that
the purchase price is entered on food instruments in accordance with the
procedures described in the vendor agreement. The State agency has the
discretion to determine whether the vendor or the participant enters the
purchase price. The purchase price must include only the authorized
supplemental food items actually provided and must be entered on the
food instrument before it is signed.
(vi) Signature on food instruments. For printed food instruments,
the vendor must ensure the participant, parent or caretaker of an infant
or child participant, or proxy signs the food instrument in the presence
of the cashier. In EBT systems, a Personal Identification Number (PIN)
may be used in lieu of a signature.
(vii) Sales tax prohibition. The vendor may not collect sales tax on
authorized supplemental foods obtained with food instruments.
(viii) Food instrument redemption. The vendor must submit food
instruments for redemption in accordance with the redemption procedures
described in the vendor agreement. The vendor may redeem a food
instrument only within the specified time period. As part of the
redemption procedures, the State agency may make price adjustments to
the purchase price on food instruments submitted by the vendor for
redemption to ensure compliance with the price limitations applicable to
the vendor. As part of the redemption procedures, the State agency must
establish and apply limits on the amount of reimbursement allowed for
food instruments based on a vendor's peer group and competitive price
criteria. In setting allowable reimbursement levels, the State agency
must consider participant access in a geographic area and may include a
factor to reflect fluctuations in wholesale prices. In establishing
allowable reimbursement levels for above-50-percent vendors the State
agency must ensure that reimbursements do not result in higher food
costs than if participants transacted their food instruments at vendors
that are not above-50-percent vendors, or in higher average payments per
food instrument to above-50-percent vendors than average payments to
comparable vendors. The State agency may make price adjustments to the
purchase price on food instruments submitted by the vendor for
redemption to ensure compliance with the allowable reimbursement level
applicable to the vendor. A vendor's failure to remain price competitive
is cause for termination of the vendor agreement, even if actual
payments to the vendor are within the maximum reimbursement amount. The
State agency may exempt vendors that supply only exempt infant formula
and/or WIC-eligible medical foods and non-profit above-50-percent
vendors from the allowable reimbursement limits.
(ix) Vendor claims. When the State agency determines the vendor has
committed a vendor violation that affects the payment to the vendor, the
State agency will delay payment or establish a claim. The State agency
may delay payment or establish a claim in the amount of the full
purchase price of each food instrument that contained the vendor
overcharge or other error. The State agency will provide the vendor with
an opportunity to justify or correct a vendor overcharge or other error.
The vendor must pay any claim assessed by the State agency. In
collecting a claim, the State agency may offset the claim against
current and
[[Page 361]]
subsequent amounts to be paid to the vendor. In addition to denying
payment or assessing a claim, the State agency may sanction the vendor
for vendor overcharges or other errors in accordance with the State
agency's sanction schedule.
(x) No charge for authorized supplemental foods or restitution from
participants. The vendor may not charge participants, parents or
caretakers of infant and child participants, or proxies for authorized
supplemental foods obtained with food instruments. In addition, the
vendor may not seek restitution from these individuals for food
instruments not paid or partially paid by the State agency.
(xi) Training. At least one representative of the vendor must
participate in training annually. Annual vendor training may be provided
by the State agency in a variety of formats, including newsletters,
videos, and interactive training. The State agency will have sole
discretion to designate the date, time, and location of all interactive
training, except that the State agency will provide the vendor with at
least one alternative date on which to attend such training.
(xii) Vendor training of staff. The vendor must inform and train
cashiers and other staff on program requirements.
(xiii) Accountability for owners, officers, managers, and employees.
The vendor is accountable for its owners, officers, managers, agents,
and employees who commit vendor violations.
(xiv) Monitoring. The vendor may be monitored for compliance with
program requirements.
(xv) Recordkeeping. The vendor must maintain inventory records used
for Federal tax reporting purposes and other records the State agency
may require for the period of time specified by the State agency in the
vendor agreement. Upon request, the vendor must make available to
representatives of the State agency, the Department, and the Comptroller
General of the United States, at any reasonable time and place for
inspection and audit, all food instruments in the vendor's possession
and all program-related records.
(xvi) Termination. The State agency will immediately terminate the
agreement if it determines that the vendor has provided false
information in connection with its application for authorization. Either
the State agency or the vendor may terminate the agreement for cause
after providing advance written notice of a period of not less than 15
days to be specified by the State agency.
(xvii) Change in ownership or location or cessation of operations.
The vendor must provide the State agency advance written notification of
any change in vendor ownership, store location, or cessation of
operations. In such instances, the State agency will terminate the
vendor agreement, except that the State agency may permit vendors to
move short distances without terminating the agreement. The State agency
has the discretion to determine the length of advance notice required
for vendors reporting changes under this provision, whether a change in
location qualifies as a short distance, and whether a change in business
structure constitutes a change in ownership.
(xviii) Sanctions. In addition to claims collection, the vendor may
be sanctioned for vendor violations in accordance with the State
agency's sanction schedule. Sanctions may include administrative fines,
disqualification, and civil money penalties in lieu of disqualification.
The State agency does not have to provide the vendor with prior warning
that violations were occurring before imposing such sanctions.
(xix) Conflict of interest. The State agency will terminate the
agreement if the State agency identifies a conflict of interest, as
defined by applicable State laws, regulations, and policies, between the
vendor and the State agency or its local agencies.
(xx) Criminal penalties. A vendor who commits fraud or abuse in the
Program is liable to prosecution under applicable Federal, State or
local laws. Those who have willfully misapplied, stolen or fraudulently
obtained program funds will be subject to a fine of not more than
$10,000 or imprisonment for not more than five years or both, if the
value of the funds is $100 or more. If the value is less than $100, the
penalties are a fine of not more than $1,000 or imprisonment for not
more than one year or both.
[[Page 362]]
(xxi) Not a license/property interest. The vendor agreement does not
constitute a license or a property interest. If the vendor wishes to
continue to be authorized beyond the period of its current agreement,
the vendor must reapply for authorization. If a vendor is disqualified,
the State agency will terminate the vendor's agreement, and the vendor
will have to reapply in order to be authorized after the
disqualification period is over. In all cases, the vendor's new
application will be subject to the State agency's vendor selection
criteria and any vendor limiting criteria in effect at the time of the
reapplication.
(xxii) Compliance with vendor agreement, statutes, regulations,
policies, and procedures. The vendor must comply with the vendor
agreement and Federal and State statutes, regulations, policies, and
procedures governing the Program, including any changes made during the
agreement period.
(xxiii) Nondiscrimination regulations. The vendor must comply with
the nondiscrimination provisions of Departmental regulations (Parts 15,
15a and 15b of this title).
(xxiv) Compliance with vendor selection criteria. The vendor must
comply with the vendor selection criteria throughout the agreement
period, including any changes to the criteria. Using the current vendor
selection criteria, the State agency may reassess the vendor at any time
during the agreement period. The State agency will terminate the vendor
agreement if the vendor fails to meet the current vendor selection
criteria.
(xxv) Reciprocal Food Stamp Program disqualification for WIC Program
disqualifications. Disqualification from the WIC Program may result in
disqualification as a retailer in the Food Stamp Program. Such
disqualification may not be subject to administrative or judicial review
under the Food Stamp Program.
(4) Purchase price and redemption procedures. The State agency must
describe in the vendor agreement its purchase price and redemption
procedures. The redemption procedures must ensure that the State agency
does not pay a vendor more than the price limitations applicable to the
vendor.
(5) Sanction schedule. The State agency must include its sanction
schedule in the vendor agreement or as an attachment to it. The sanction
schedule must include all mandatory and State agency vendor sanctions
and must be consistent with paragraph (l) of this section. If the
sanction schedule is in State law or regulations or in a document
provided to the vendor at the time of authorization, the State agency
instead may include an appropriate cross-reference in the vendor
agreement.
(6) Actions subject to administrative review and review procedures.
The State agency must include the adverse actions a vendor may appeal
and those adverse actions that are not subject to administrative review.
The State agency also must include a copy of the State agency's
administrative review procedures in the vendor agreement or as an
attachment to it or must include a statement that the review procedures
are available upon request and the applicable review procedures will be
provided along with an adverse action subject to administrative review.
These items must be consistent with Sec. 246.18. If these items are in
State law or regulations or in a document provided to the vendor at the
time of authorization, the State agency instead may include an
appropriate cross-reference in the vendor agreement.
(7) Notification of program changes. The State agency must notify
vendors of changes to Federal or State statutes, regulations, policies,
or procedures governing the Program before the changes are implemented.
The State agency should give as much advance notice as possible.
(i) Retail food delivery systems: Vendor training--(1) General
requirements. The State agency must provide training annually to at
least one representative of each vendor. Prior to or at the time of a
vendor's initial authorization, and at least once every three years
thereafter, the training must be in an interactive format that includes
a contemporaneous opportunity for questions and answers. The State
agency must designate the date, time, and location of the interactive
training and the audience (e.g., managers, cashiers, etc.) to which the
training is directed. The
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State agency must provide vendors with at least one alternative date on
which to attend interactive training. Examples of acceptable vendor
training include on-site cashier training, off-site classroom-style
train-the-trainer or manager training, a training video, and a training
newsletter. All vendor training must be designed to prevent program
errors and noncompliance and improve program service.
(2) Content. The annual training must include instruction on the
purpose of the Program, the supplemental foods authorized by the State
agency, the minimum varieties and quantities of authorized supplemental
foods that must be stocked by vendors, the procedures for transacting
and redeeming food instruments, the vendor sanction system, the vendor
complaint process, the claims procedures, and any changes to program
requirements since the last training.
(3) Delegation. The State agency may delegate vendor training to a
local agency, a contractor, or a vendor representative if the State
agency indicates its intention to do so in its State Plan in accordance
with Sec. 246.4(a)(14)(xi). In such cases, the State agency must
provide supervision and instruction to ensure the uniformity and quality
of vendor training.
(4) Documentation. The State agency must document the content of and
vendor participation in vendor training.
(j) Retail food delivery systems: Monitoring vendors and identifying
high-risk vendors--(1) General requirements. The State agency must
design and implement a system for monitoring its vendors for compliance
with program requirements. The State agency may delegate vendor
monitoring to a local agency or contractor if the State agency indicates
its intention to do so in its State Plan in accordance with Sec.
246.4(a)(14)(iv). In such cases, the State agency must provide
supervision and instruction to ensure the uniformity and quality of
vendor monitoring.
(2) Routine monitoring. The State agency must conduct routine
monitoring visits on a minimum of five percent of the number of vendors
authorized by the State agency as of October 1 of each fiscal year in
order to survey the types and levels of abuse and errors among
authorized vendors and to take corrective actions, as appropriate. The
State agency must develop criteria to determine which vendors will
receive routine monitoring visits and must include such criteria in its
State Plan in accordance with Sec. 246.4(a)(14)(iv).
(3) Identifying high-risk vendors. The State agency must identify
high-risk vendors at least once a year using criteria developed by FNS
and/or other statistically-based criteria developed by the State agency.
FNS will not change its criteria more frequently than once every two
years and will provide adequate advance notification of changes prior to
implementation. The State agency may develop and implement additional
criteria. All State agency-developed criteria must be approved by FNS.
(4) Compliance investigations. (i) High-risk vendors. The State
agency must conduct compliance investigations of a minimum of five
percent of the number of vendors authorized by the State agency as of
October 1 of each fiscal year. The State agency must conduct compliance
investigations on all high-risk vendors up to the five percent minimum.
The State agency may count toward this requirement a compliance
investigation of a high-risk vendor conducted by a Federal, State, or
local law enforcement agency. The State agency also may count toward
this requirement a compliance investigation conducted by another WIC
State agency provided that the State agency implements the option to
establish State agency sanctions based on mandatory sanctions imposed by
the other WIC State agency, as specified in paragraph (l)(2)(iii) of
this section. A compliance investigation of a high-risk vendor may be
considered complete when the State agency determines that a sufficient
number of compliance buys have been conducted to provide evidence of
program noncompliance, when two compliance buys have been conducted in
which no program violations are found, or when an inventory audit has
been completed.
(ii) Randomly selected vendors. If fewer than five percent of the
State agency's authorized vendors are identified as
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high-risk, the State agency must randomly select additional vendors on
which to conduct compliance investigations sufficient to meet the five-
percent requirement. A compliance investigation of a randomly selected
vendor may be considered complete when the State agency determines that
a sufficient number of compliance buys have been conducted to provide
evidence of program noncompliance, when two compliance buys are
conducted in which no program violations are found, or when an inventory
audit has been completed.
(iii) Prioritization. If more than five percent of the State
agency's vendors are identified as high-risk, the State agency must
prioritize such vendors so as to perform compliance investigations of
those determined to have the greatest potential for program
noncompliance and/or loss of funds.
(5) Monitoring report. For each fiscal year, the State agency must
send FNS a summary of the results of its vendor monitoring containing
information stipulated by FNS. The report must be sent by February 1 of
the following fiscal year. Plans for improvement in the coming year must
be included in the State Plan in accordance with Sec. 246.4(a)(14)(iv).
(6) Documentation--(i) Monitoring visits. The State agency must
document the following information for all monitoring visits, including
routine monitoring visits, inventory audits, and compliance buys:
(A) the date of the monitoring visit, inventory audit, or compliance
buy;
(B) the name(s) and signature(s) of the reviewer(s); and
(C) the nature of any problem(s) detected.
(ii) Compliance buys. For compliance buys, the State agency must
also document:
(A) the date of the buy;
(B) a description of the cashier involved in each transaction;
(C) the types and quantities of items purchased, current shelf
prices or prices charged other customers, and price charged for each
item purchased, if available. Price information may be obtained prior
to, during, or subsequent to the compliance buy; and
(D) the final disposition of all items as destroyed, donated,
provided to other authorities, or kept as evidence.
(k) Retail food delivery systems: Vendor claims--(1) System to
review food instruments. The State agency must design and implement a
system to review food instruments submitted by vendors for redemption to
ensure compliance with the applicable price limitations and to detect
questionable food instruments, suspected vendor overcharges, and other
errors. This review must examine either all or a representative sample
of the food instruments and may be done either before or after the State
agency makes payments on the food instruments. The review must include a
price comparison or other edit designed to ensure compliance with the
applicable price limitations and to assist in detecting vendor
overcharges. For printed food instruments, the system also must detect
the following errors: purchase price missing; participant, parent/
caretaker, or proxy signature missing; vendor identification missing;
food instruments transacted or redeemed after the specified time
periods; and, as appropriate, altered purchase price. The State agency
must take follow-up action within 120 days of detecting any questionable
food instruments, suspected vendor overcharges, and other errors and
must implement procedures to reduce the number of errors when possible.
(2) Delaying payment and establishing a claim. When the State agency
determines the vendor has committed a vendor violation that affects the
payment to the vendor, the State agency must delay payment or establish
a claim. Such vendor violations may be detected through compliance
investigations, food instrument reviews, or other reviews or
investigations of a vendor's operations. The State agency may delay
payment or establish a claim in the amount of the full purchase price of
each food instrument that contained the vendor overcharge or other
error.
(3) Opportunity to justify or correct. When payment for a food
instrument is delayed or a claim is established, the State agency must
provide the vendor with an opportunity to justify or correct the vendor
overcharge or other
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error. If satisfied with the justification or correction, the State
agency must provide payment or adjust the proposed claim accordingly.
(4) Timeframe and offset. The State agency must deny payment or
initiate claims collection action within 90 days of either the date of
detection of the vendor violation or the completion of the review or
investigation giving rise to the claim, whichever is later. Claims
collection action may include offset against current and subsequent
amounts owed to the vendor.
(5) Food instruments redeemed after the specified period. With
justification and documentation, the State agency may pay vendors for
food instruments submitted for redemption after the specified period for
redemption. If the total value of such food instruments submitted at one
time exceeds $500.00, the State agency must obtain the approval of the
FNS Regional Office before payment.
(l) Retail food delivery systems: Vendor sanctions--(1) Mandatory
vendor sanctions--(i) Permanent disqualification. The State agency must
permanently disqualify a vendor convicted of trafficking in food
instruments or selling firearms, ammunition, explosives, or controlled
substances (as defined in section 102 of the Controlled Substances Act
(21 U.S.C. 802)) in exchange for food instruments. A vendor is not
entitled to receive any compensation for revenues lost as a result of
such violation. If reflected in its State Plan, the State agency may
impose a civil money penalty in lieu of a disqualification for this
violation when it determines, in its sole discretion, and documents
that:
(A) Disqualification of the vendor would result in inadequate
participant access; or
(B) The vendor had, at the time of the violation, an effective
policy and program in effect to prevent trafficking; and the ownership
of the vendor was not aware of, did not approve of, and was not involved
in the conduct of the violation.
(ii) Six-year disqualification. The State agency must disqualify a
vendor for six years for:
(A) One incidence of buying or selling food instruments for cash
(trafficking); or
(B) One incidence of selling firearms, ammunition, explosives, or
controlled substances as defined in 21 U.S.C. 802, in exchange for food
instruments.
(iii) Three-year disqualification. The State agency must disqualify
a vendor for three years for:
(A) One incidence of the sale of alcohol or alcoholic beverages or
tobacco products in exchange for food instruments;
(B) A pattern of claiming reimbursement for the sale of an amount of
a specific supplemental food item which exceeds the store's documented
inventory of that supplemental food item for a specific period of time;
(C) A pattern of vendor overcharges;
(D) A pattern of receiving, transacting and/or redeeming food
instruments outside of authorized channels, including the use of an
unauthorized vendor and/or an unauthorized person;
(E) A pattern of charging for supplemental food not received by the
participant; or
(F) A pattern of providing credit or non-food items, other than
alcohol, alcoholic beverages, tobacco products, cash, firearms,
ammunition, explosives, or controlled substances as defined in 21 U.S.C.
802, in exchange for food instruments.
(iv) One-year disqualification. The State agency must disqualify a
vendor for one year for a pattern of providing unauthorized food items
in exchange for food instruments, including charging for supplemental
foods provided in excess of those listed on the food instrument.
(v) Second mandatory sanction. When a vendor, who previously has
been assessed a sanction for any of the violations in paragraphs
(l)(1)(ii) through (l)(1)(iv) of this section, receives another sanction
for any of these violations, the State agency must double the second
sanction. Civil money penalties may only be doubled up to the limits
allowed under paragraph (l)(1)(x)(C) of this section.
(vi) Third or subsequent mandatory sanction. When a vendor, who
previously has been assessed two or more
[[Page 366]]
sanctions for any of the violations listed in paragraphs (l)(1)(ii)
through (l)(1)(iv) of this section, receives another sanction for any of
these violations, the State agency must double the third sanction and
all subsequent sanctions. The State agency may not impose civil money
penalties in lieu of disqualification for third or subsequent sanctions
for violations listed in paragraphs (l)(1)(ii) through (l)(1)(iv) of
this section.
(vii) Disqualification based on a Food Stamp Program
disqualification. The State agency must disqualify a vendor who has been
disqualified from the Food Stamp Program. The disqualification must be
for the same length of time as the Food Stamp Program disqualification,
may begin at a later date than the Food Stamp Program disqualification,
and is not subject to administrative or judicial review under the WIC
Program.
(viii) Voluntary withdrawal or nonrenewal of agreement. The State
agency may not accept voluntary withdrawal of the vendor from the
Program as an alternative to disqualification for the violations listed
in paragraphs (l)(1)(i) through (l)(1)(iv) of this section, but must
enter the disqualification on the record. In addition, the State agency
may not use nonrenewal of the vendor agreement as an alternative to
disqualification.
(ix) Participant access determinations. Prior to disqualifying a
vendor for a Food Stamp Program disqualification pursuant to paragraph
(l)(1)(vii) of this section or for any of the violations listed in
paragraphs (l)(1)(ii) through (l)(1)(iv) of this section, the State
agency must determine if disqualification of the vendor would result in
inadequate participant access. The State agency must make the
participant access determination in accordance with paragraph (l)(8) of
this section. If the State agency determines that disqualification of
the vendor would result in inadequate participant access, the State
agency must impose a civil money penalty in lieu of disqualification.
However, as provided in paragraph (l)(1)(vi) of this section, the State
agency may not impose a civil money penalty in lieu of disqualification
for third or subsequent sanctions for violations in paragraphs
(l)(1)(ii) through (l)(1)(iv) of this section. The State agency must
include documentation of its participant access determination and any
supporting documentation in the file of each vendor who is disqualified
or receives a civil money penalty in lieu of disqualification.
(x) Civil money penalty formula. For each violation subject to a
mandatory sanction, the State agency must use the following formula to
calculate a civil money penalty imposed in lieu of disqualification:
(A) Determine the vendor's average monthly redemptions for at least
the 6-month period ending with the month immediately preceding the month
during which the notice of adverse action is dated;
(B) Multiply the average monthly redemptions figure by 10 percent
(.10);
(C) Multiply the product from paragraph (l)(1)(x)(B) of this section
by the number of months for which the store would have been
disqualified. This is the amount of the civil money penalty, provided
that the civil money penalty shall not exceed $10,000 for each
violation. For a violation that warrants permanent disqualification, the
amount of the civil money penalty shall be $10,000, except for those
violations listed in paragraph (l)(1)(i) of this section, where the
civil money penalty shall be the maximum amount per violation specified
in Sec. 3.91(b)(3)(v) of this title for trafficking violations, or
Sec. 3.91(b)(3)(vi) of this title for selling firearms, ammunition,
explosives, or controlled substances in exchange for food instruments.
When during the course of a single investigation the State agency
determines a vendor has committed multiple violations, the State agency
must impose a CMP for each violation. The total amount of civil money
penalties imposed for violations investigated as part of a single
investigation may not exceed $40,000, except for those violations listed
in paragraph (l)(1)(i) of this section, where the total amount of civil
money penalties may not exceed the maximum amount for violations
occurring during a single investigation specified in Sec. 3.91(b)(3)(v)
of this title for trafficking violations, or Sec. 3.91(b)(3)(vi) of
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this title for selling firearms, ammunition, explosives, or controlled
substances in exchange for food instruments.
(xi) Notification to FNS. The State agency must provide the
appropriate FNS office with a copy of the notice of adverse action and
information on vendors it has either disqualified or imposed a civil
money penalty in lieu of disqualification for any of the violations
listed in paragraphs (l)(1)(i) through (l)(1)(iv) of this section. This
information must include the name of the vendor, address, identification
number, the type of violation(s), and the length of disqualification or
the length of the disqualification corresponding to the violation for
which the civil money penalty was assessed, and must be provided within
15 days after the vendor's opportunity to file for a WIC administrative
review has expired or all of the vendor's WIC administrative reviews
have been completed.
(xii) Multiple violations during a single investigation. When during
the course of a single investigation the State agency determines a
vendor has committed multiple violations (which may include violations
subject to State agency sanctions), the State agency must disqualify the
vendor for the period corresponding to the most serious mandatory
violation. However, the State agency must include all violations in the
notice of administration action. If a mandatory sanction is not upheld
on appeal, then the State agency may impose a State agency-established
sanction.
(2) State agency vendor sanctions. (i) General requirements. The
State agency may impose sanctions for vendor violations that are not
specified in paragraphs (l)(1)(i) through (l)(1)(iv) of this section as
long as such vendor violations and sanctions are included in the State
agency's sanction schedule. State agency sanctions may include
disqualifications, civil money penalties assessed in lieu of
disqualification, and administrative fines. The total period of
disqualification imposed for State agency violations investigated as
part of a single investigation may not exceed one year. A civil money
penalty or fine may not exceed $10,000 for each violation. The total
amount of civil money penalties and administrative fines imposed for
violations investigated as part of a single investigation may not exceed
$40,000.
(ii) Food Stamp Program civil money penalty for hardship. The State
agency may disqualify a vendor that has been assessed a civil money
penalty for hardship in the Food Stamp Program, as provided under Sec.
278.6 of this chapter. The length of such disqualification must
correspond to the period for which the vendor would otherwise have been
disqualified in the Food Stamp Program. If a State agency decides to
exercise this option, the State agency must:
(A) Include notification that it will take such disqualification
action in its sanction schedule; and
(B) Determine if disqualification of the vendor would result in
inadequate participant access in accordance with paragraph (l)(8) of
this section. If the State agency determines that disqualification of
the vendor would result in inadequate participant access, the State
agency may not disqualify the vendor or impose a civil money penalty in
lieu of disqualification. The State agency must include documentation of
its participant access determination and any supporting documentation in
each vendor's file.
(iii) A mandatory sanction by another WIC State agency. The State
agency may disqualify a vendor that has been disqualified or assessed a
civil money penalty in lieu of disqualification by another WIC State
agency for a mandatory vendor sanction. The length of the
disqualification must be for the same length of time as the
disqualification by the other WIC State agency or, in the case of a
civil money penalty in lieu of disqualification assessed by the other
WIC State agency, for the same length of time for which the vendor would
otherwise have been disqualified. The disqualification may begin at a
later date than the sanction imposed by the other WIC State agency. If a
State agency decides to exercise this option, the State agency must:
(A) Include notification that it will take such action in its
sanction schedule; and
(B) Determine if disqualification of the vendor would result in
inadequate
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participant access in accordance with paragraph (l)(8) of this section.
If the State agency determines that disqualification of the vendor would
result in inadequate participant access, the State agency must impose a
civil money penalty in lieu of disqualification, except that the State
agency may not impose a civil money penalty in situations in which the
vendor has been assessed a civil money penalty in lieu of
disqualification by the other WIC State agency. Any civil money penalty
in lieu of disqualification must be calculated in accordance with
paragraph (l)(2)(x) of this section. The State agency must include
documentation of its participant access determination and any supporting
documentation in each vendor's file.
(3) Prior warning. The State agency does not have to provide the
vendor with prior warning that violations were occurring before imposing
any of the sanctions in paragraph (l) of this section.
(4) Administrative reviews. The State agency must provide
administrative reviews of sanctions to the extent required by Sec.
246.18.
(5) Installment plans. The State agency may use installment plans
for the collection of civil money penalties and administrative fines.
(6) Failure to pay a civil money penalty. If a vendor does not pay,
only partially pays, or fails to timely pay a civil money penalty
assessed in lieu of disqualification, the State agency must disqualify
the vendor for the length of the disqualification corresponding to the
violation for which the civil money penalty was assessed (for a period
corresponding to the most serious violation in cases where a mandatory
sanction included the imposition of multiple civil money penalties as a
result of a single investigation).
(7) Actions in addition to sanctions. Vendors may be subject to
actions in addition to the sanctions in this section, such as claims
pursuant to paragraph (k) of this section and the penalties set forth in
Sec. 246.23(c) in the case of deliberate fraud.
(8) Participant access determination criteria. The State agency must
develop participant access criteria. When making participant access
determinations, the State agency must consider the availability of other
authorized vendors in the same area as the violative vendor and any
geographic barriers to using such vendors.
(9) Termination of agreement. When the State agency disqualifies a
vendor, the State agency must also terminate the vendor agreement.
(m) Home food delivery systems. Home food delivery systems are
systems in which authorized supplemental foods are delivered to the
participant's home. Home food delivery systems must provide for:
(1) Procurement. Procurement of supplemental foods in accordance
with Sec. 246.24, which may entail measures such as the purchase of
food in bulk lots by the State agency and the use of discounts that are
available to States.
(2) Accountability. The accountable delivery of authorized
supplemental foods to participants. The State agency must ensure that:
(i) Home food delivery contractors are paid only after the delivery
of authorized supplemental foods to participants;
(ii) A routine procedure exists to verify the correct delivery of
authorized supplemental foods to participants, and, at a minimum, such
verification occurs at least once a month after delivery; and
(iii) Records of delivery of supplemental foods and bills sent or
payments received for such supplemental foods are retained for at least
three years. Federal, State, and local authorities must have access to
such records.
(n) Direct distribution food delivery systems. Direct distribution
food delivery systems are systems in which participants, parents or
caretakers of infant or child participants, or proxies pick up
authorized supplemental foods from storage facilities operated by the
State agency or its local agencies. Direct distribution food delivery
systems must provide for:
(1) Storage and insurance. Adequate storage and insurance coverage
that minimizes the danger of loss due to theft, infestation, fire,
spoilage, or other causes;
[[Page 369]]
(2) Inventory. Adequate inventory control of supplemental foods
received, in stock, and issued;
(3) Procurement. Procurement of supplemental foods in accordance
with Sec. 246.24, which may entail measures such as purchase of food in
bulk lots by the State agency and the use of discounts that are
available to States;
(4) Availability. The availability of program benefits to
participants and potential participants who live at great distance from
storage facilities; and
(5) Accountability. The accountable delivery of authorized
supplemental foods to participants.
(o) Participant, parent/caretaker, proxy, vendor, and home food
delivery contractor complaints. The State agency must have procedures to
document the handling of complaints by participants, parents or
caretakers of infant or child participants, proxies, vendors, home food
delivery contractors, and direct distribution contractors. Complaints of
civil rights discrimination must be handled in accordance with Sec.
246.8(b).
(p) Food instrument security. The State agency must develop
standards for ensuring the security of food instruments from the time
the food instruments are created to the time they are issued to
participants, parents/caretakers, or proxies. For pre-printed food
instruments, these standards must include maintenance of perpetual
inventory records of food instruments throughout the State agency's
jurisdiction; monthly physical inventory of food instruments on hand
throughout the State agency's jurisdiction; reconciliation of perpetual
and physical inventories of food instruments; and maintenance of all
food instruments under lock and key, except for supplies needed for
immediate use. For EBT and print-on-demand food instruments, the
standards must provide for the accountability and security of the means
to manufacture and issue such food instruments.
(q) Food instrument disposition. The State agency must account for
the disposition of all food instruments as either issued or voided, and
as either redeemed or unredeemed. Redeemed food instruments must be
identified as validly issued, lost, stolen, expired, duplicate, or not
matching valid enrollment and issuance records. In an EBT system,
evidence of matching redeemed food instruments to valid enrollment and
issuance records may be satisfied through the linking of the Primary
Account Number (PAN) associated with the electronic transaction to valid
enrollment and issuance records. This process must be performed within
150 days of the first valid date for participant use of the food
instruments and must be conducted in accordance with the financial
management requirements of Sec. 246.13. The State agency will be
subject to claims as outlined in Sec. 246.23(a)(4) for redeemed food
instruments that do not meet the conditions established in paragraph (q)
of this section.
(r) Issuance of food instruments and authorized supplemental foods.
The State agency must:
(1) Parents/caretakers and proxies. Establish uniform procedures
that allow parents and caretakers of infant and child participants and
proxies to obtain and transact food instruments or obtain authorized
supplemental foods on behalf of a participant. In determining whether a
particular participant or parent/caretaker should be allowed to
designate a proxy or proxies, the State agency must require the local
agency or clinic to consider whether adequate measures can be
implemented to provide nutrition education and health care referrals to
that participant or, in the case of an infant or child participant, to
the participant's parent or caretaker;
(2) Signature requirement. Ensure that the participant, parent or
caretaker of an infant or child participant, or proxy signs for receipt
of food instruments or authorized supplemental foods, except as provided
in paragraph (r)(4) of this section;
(3) Instructions. Ensure that participants, parents or caretakers of
infant and child participants, and proxies receive instructions on the
proper use of food instruments, or on the procedures for obtaining
authorized supplemental foods when food instruments are not used. The
State agency must also ensure that participants, parents or caretakers
of infant and child participants, and proxies are notified that they
have the right to complain about improper
[[Page 370]]
vendor and home food delivery contractor practices with regard to
program responsibilities;
(4) Food instrument pick up. Require participants, parents and
caretakers of infant and child participants, and proxies to pick up food
instruments in person when scheduled for nutrition education or for an
appointment to determine whether participants are eligible for a second
or subsequent certification period. However, in all other circumstances
the State agency may provide for issuance through an alternative means
such as EBT or mailing, unless FNS determines that such actions would
jeopardize the integrity of program services or program accountability.
If a State agency opts to mail food instruments, it must provide
justification, as part of its alternative issuance system in its State
Plan, as required in Sec. 246.4(a)(21), for mailing food instruments to
areas where food stamps are not mailed. State agencies that opt to mail
food instruments must establish and implement a system that ensures the
return of food instruments to the State or local agency if a participant
no longer resides or receives mail at the address to which the food
instruments were mailed; and
(5) Maximum issuance of food instruments. Ensure that no more than a
three-month supply of food instruments or a one-month supply of
authorized supplemental foods is issued at any one time to any
participant, parent or caretaker of an infant or child participant, or
proxy.
(s) Payment to vendors and home food delivery contractors. The State
agency must ensure that vendors and home food delivery contractors are
paid promptly. Payment must be made within 60 days after valid food
instruments are submitted for redemption. Actual payment to vendors and
home food delivery contractors may be made by local agencies.
(t) Conflict of interest. The State agency must ensure that no
conflict of interest exists, as defined by applicable State laws,
regulations, and policies, between the State agency and any vendor or
home food delivery contractor, or between any local agency and any
vendor or home food delivery contractor under its jurisdiction.
(u) Participant violations and sanctions--(1) General requirements.
The State agency must establish procedures designed to control
participant violations. The State agency also must establish sanctions
for participant violations. Participant sanctions may include
disqualification from the Program for a period of up to one year.
(2) Mandatory disqualification. (i) General. Except as provided in
paragraphs (u)(2)(ii) and (u)(2)(iii) of this section, whenever the
State agency assesses a claim of $100 or more, assesses a claim for dual
participation, or assess a second or subsequent claim of any amount, the
State agency must disqualify the participant for one year.
(ii) Exceptions to mandatory disqualification. The State agency may
decide not to impose a mandatory disqualification if, within 30 days of
receipt of the letter demanding repayment, full restitution is made or a
repayment schedule is agreed on, or, in the case of a participant who is
an infant, child, or under age 18, the State or local agency approves
the designation of a proxy.
(iii) Terminating a mandatory disqualification. The State agency may
permit a participant to reapply for the Program before the end of a
mandatory disqualification period if full restitution is made or a
repayment schedule is agreed upon or, in the case of a participant who
is an infant, child, or under age 18, the State or local agency approves
the designation of a proxy.
(3) Warnings before sanctions. The State agency may provide warnings
before imposing participant sanctions.
(4) Fair hearings. At the time the State agency notifies a
participant of a disqualification, the State agency must advise the
participant of the procedures to follow to obtain a fair hearing
pursuant to Sec. 246.9.
(5) Referral to law enforcement authorities. When appropriate, the
State agency must refer vendors, home food delivery contractors, and
participants who violate program requirements to Federal, State, or
local authorities for prosecution under applicable statutes.
[65 FR 83278, Dec. 29, 2000, as amended at 70 FR 29579, May 24, 2005; 70
FR 71722, Nov. 29, 2005]
[[Page 371]]
Sec. 246.13 Financial management system.
(a) Disclosure of expenditures. The State agency shall maintain a
financial management system which provides accurate, current and
complete disclosure of the financial status of the Program. This shall
include an accounting for all property and other assets and all Program
funds received and expended each fiscal year.
(b) Internal control. The State agency shall maintain effective
control over and accountability for all Program grants and funds. The
State agency must have effective internal controls to ensure that
expenditures financed with Program funds are authorized and properly
chargeable to the Program.
(c) Record of expenditures. The State agency shall maintain records
which adequately identify the source and use of funds expended for
Program activities. These records shall contain, but are not limited to,
information pertaining to authorization, receipt of funds, obligations,
unobligated balances, assets, liabilities, outlays, and income.
(d) Payment of costs. The State shall implement procedures which
ensure prompt and accurate payment of allowable costs, and ensure the
allowability and allocability of costs in accordance with the cost
principles and standard provisions of this part, 7 CFR part 3016, and
FNS guidelines and instructions.
(e) Identification of obligated funds. The State agency shall
implement procedures which accurately identify obligated Program funds
at the time the obligations are made.
(f) Resolution of audit findings. The State agency shall implement
procedures which ensure timely and appropriate resolution of claims and
other matters resulting from audit findings and recommendations.
(g) Use of minority- and women-owned banks. Consistent with the
national goals of expanding opportunities for minority business
enterprises, State and local agencies are encouraged to use minority-
and women-owned banks.
(h) Adjustment of expenditures. The State agency must adjust
projected expenditures to account for redeemed food instruments and for
other changes as appropriate.
(i) Transfer of cash. The State agency shall have controls to
minimize the time elapsing between receipt of Federal funds from the
U.S. Department of Treasury and the disbursements of these funds for
Program costs. In the Letter of Credit system, the State agency shall
make drawdowns from the U.S. Department of Treasury's Regional
Disbursing Office as close as possible to the actual date that
disbursement of funds is made. Advances made by the State agency to
local agencies shall also conform to these same standards.
(j) Local agency financial management. The State agency shall ensure
that all local agencies develop and implement a financial management
system consistent with requirements prescribed by FNS and the State
agency pursuant to the requirements of this section.
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 65
FR 83286, Dec. 29, 2000]
Sec. 246.14 Program costs.
(a) General. (1) The two kinds of allowable costs under the Program
are ``food costs'' and ``nutrition services and administration costs.''
In general, costs necessary to the fulfillment of Program objectives are
to be considered allowable costs. The two types of nutrition services
and administration costs are:
(i) Direct costs. Those direct costs that are allowable under 7 CFR
part 3016.
(ii) Indirect costs. Those indirect costs that are allowable under 7
CFR part 3016. When computing indirect costs, food costs may not be used
in the base to which the indirect cost rate is applied. In accordance
with the provisions of 7 CFR part 3016, a claim for indirect costs shall
be supported by an approved allocation plan for the determination of
allowable indirect costs.
(2) Except as provided in paragraph (e) of this section and
Sec. Sec. 246.16(g) and 246.16(h) of this part, funds allocated by FNS
for food purchases may not be used to pay nutrition services and
administration costs. However, nutrition services and administration
funds may be used to pay for food costs.
(b) What costs may I charge to the food grant? (1) The State agency
may use food funds for costs of:
[[Page 372]]
(i) Acquiring supplemental foods provided to State or local agencies
or participants, whichever receives the supplemental food first;
(ii) Warehousing supplemental foods; and
(iii) Purchasing and renting breast pumps.
(2) For costs to be allowable, the State agency must ensure that
food costs do not exceed the customary sales price charged by the
vendor, home food delivery contractor, or supplier in a direct
distribution food delivery system. In addition, food costs may not
exceed the price limitations applicable to the vendor.
(c) Specified allowable nutrition services and administration costs.
Allowable nutrition services and administration (NSA) costs include the
following:
(1) The cost of nutrition education and breastfeeding promotion and
support which meets the requirements of Sec. 246.11. During each fiscal
year, each State agency shall expend, for nutrition education activities
and breastfeeding promotion and support activities, an aggregate amount
that is not less than the sum of one-sixth of the amount expended by the
State agency for costs of NSA and an amount equal to its proportionate
share of the national minimum expenditure for breastfeeding promotion
and support activities. The amount to be spent on nutrition education
shall be computed by taking one-sixth of the total fiscal year NSA
expenditures. The amount to be spent by a State agency on breastfeeding
promotion and support activities shall be an amount that is equal to at
least its proportionate share of the national minimum breastfeeding
promotion expenditure as specified in paragraph (c)(1) of this section.
The national minimum expenditure for breastfeeding promotion and support
activities shall be equal to $21 multiplied by the number of pregnant
and breastfeeding women in the Program, based on the average of the last
three months for which the Department has final data. On October 1, 1996
and each October 1 thereafter, the $21 will be adjusted annually using
the same inflation percentage used to determine the national
administrative grant per person. If the State agency's total reported
nutrition education and breastfeeding promotion and support expenditures
are less than the required amount of expenditures, FNS will issue a
claim for the difference. The State agency may request prior written
permission from FNS to spend less than the required portions of its NSA
grant for either nutrition education or for breastfeeding promotion and
support activities. FNS will grant such permission if the State agency
has sufficiently documented that other resources, including in-kind
resources, will be used to conduct these activities at a level
commensurate with the requirements of this paragraph (c)(1). However,
food costs used to purchase or rent breast pumps may not be used for
this purpose. Nutrition education costs are limited to activities which
are distinct and separate efforts to help participants understand the
importance of nutrition to health. The cost of dietary assessments for
the purpose of certification, the cost of prescribing and issuing
supplemental foods, the cost of screening for drug and other harmful
substance use and making referrals to drug and other harmful substance
abuse services, and the cost of other health-related screening shall not
be applied to the expenditure requirement for nutrition education and
breastfeeding promotion and support activities. The Department shall
advise State agencies regarding methods for minimizing documentation of
the nutrition education and breastfeeding promotion and support
expenditure requirement. Costs to be applied to the one-sixth minimum
amount required to be spent on nutrition education and the target share
of funds required to be spent on breastfeeding promotion and support
include, but need not be limited to--
(i) Salary and other costs for time spent on nutrition education and
breastfeeding promotion and support consultations whether with an
individual or group;
(ii) The cost of procuring and producing nutrition education and
breastfeeding promotion and support materials including handouts, flip
charts, filmstrips, projectors, food models or other teaching aids, and
the cost of mailing nutrition education or
[[Page 373]]
breastfeeding promotion and support materials to participants;
(iii) The cost of training nutrition or breastfeeding promotion and
support educators, including costs related to conducting training
sessions and purchasing and producing training materials;
(iv) The cost of conducting evaluations of nutrition education or
breastfeeding promotion and support activities, including evaluations
conducted by contractors;
(v) Salary and other costs incurred in developing the nutrition
education and breastfeeding promotion and support portion of the State
Plan and local agency nutrition education and breastfeeding promotion
and support plans; and
(vi) The cost of monitoring nutrition education and breastfeeding
promotion and support activities.
(2) The cost of Program certification, nutrition assessment and
procedures and equipment used to determine nutritional risk, including
the following:
(i) Laboratory fees incurred for up to two hematological tests for
anemia per individual per certification period. The first test shall be
to determine anemia status. The second test may be performed only in
follow up to a finding of anemia when deemed necessary for health
monitoring as determined by the WIC State agency;
(ii) Expendable medical supplies;
(iii) Medical equipment used for taking anthropometric measurements,
such as scales, measuring boards, and skin fold calipers; and for blood
analysis to detect anemia, such as spectrophotometers,
hematofluorometers and centrifuges; and
(iv) Salary and other costs for time spent on nutrition assessment
and certification.
(3) The cost of outreach services.
(4) The cost of administering the food delivery system, including
the cost of transporting food.
(5) The cost of translators for materials and interpreters.
(6) The cost of fair hearings, including the cost of an independent
medical assessment of the appellant, if necessary.
(7) The cost of transporting rural participants to clinics when
prior approval for using Program funds to provide transportation has
been granted by the State agency and documentation that such service is
considered essential to assure Program access has been filed at the
State agency. Direct reimbursement to participants for transportation
cost is not an allowable cost.
(8) The cost of monitoring and reviewing Program operations.
(9) The cost, exclusive of laboratory tests, of screening for drug
and other harmful substance use and making referrals for counseling and
treatment services.
(10) The cost of breastfeeding aids which directly support the
initiation and continuation of breastfeeding.
(d) Costs allowable with approval. The following costs are allowable
only with the prior approval of FNS:
(1) Automated information systems which are required by a State or
local agency except for those used in general management and payroll,
including acquisition of automatic data processing hardware or software
whether by outright purchase, rental-purchase agreement or other method
of acquisition. Approval shall be granted by FNS if the proposed system
meets the requirements of this part, A-130, and 7 CFR part 3016. At the
time the State agency decides to seek computerization, except for use in
general management or payroll, it shall inform FNS and seek approval, if
required.
(2) Capital expenditures over $2,500.00, such as the cost of
facilities, equipment, including medical equipment, other capital assets
and any repairs that materially increase the value of useful life of
capital assets.
(3) Management studies performed by agencies or departments other
than the State or local agency or those performed by outside consultants
under contract with the State or local agency.
(e) How and when may I use my funds recovered from vendors and
participants? (1) The State agency may keep funds collected through the
recovery of claims assessed against food vendors or participants.
Recovered funds include those withheld from a vendor as a result of
reviews of food instruments
[[Page 374]]
prior to payment. Recovered funds may be used for either food or NSA
costs.
(2) These recovered funds may be used in the fiscal year:
(i) In which the initial obligation was made;
(ii) In which the claim arose;
(iii) In which the funds are collected; or
(iv) after the funds are collected.
(3) The State agency may not credit any recoveries until:
(i) In the case of a vendor claim, the vendor has had the
opportunity to correct or justify the error or apparent overcharge in
accordance with Sec. 246.12(k)(3); or
(ii) In the case of a participant, any administrative hearing
requested in accordance with Sec. 246.9 has been completed.
(4) The State agency must report vendor and participant recoveries
to FNS through the normal reporting process;
(5) The State agency must keep documentation supporting the amount
and use of these vendor and participant recoveries.
[50 FR 6121, Feb. 13, 1987, as amended at 52 FR 21237, June 4, 1987; 53
FR 25314, July 6, 1988; 54 FR 18091, Apr. 27, 1989; 58 FR 11507, Feb.
26, 1993; 59 FR 11503, Mar. 11, 1994; 63 FR 63974, Nov. 18, 1998; 64 FR
67999, Dec. 6, 1999; 64 FR 70178, Dec. 16, 1999; 65 FR 83286, Dec. 29,
2000]
Sec. 246.15 Program income other than grants.
(a) Interest earned on advances. Interest earned on advances of
Program funds at the State and local levels shall be treated in
accordance with the provisions of 31 CFR Part 205, which implement the
requirements of the Cash Management Improvement Act of 1990. However,
State agencies will not incur an interest liability to the Federal
government on rebate funds for infant formula or other foods, provided
that all interest earned on such funds is used for program purposes.
(b) Other Program income. The State agency may use current Program
income for costs incurred in the current fiscal year and, with the
approval of FNS, for costs incurred in previous or subsequent fiscal
years. With the approval of FNS, Program income may be used for costs
which are in addition to the allowable costs of the Program but which
nevertheless further the objectives of the law authorizing the Program.
Provided that the costs supported by the income further the broad
objectives of the Program, they need not be a kind that would be
permissible as charges to Federal funds. Money received by the State
agency as a result of civil money penalties or fines assessed against a
vendor and any interest charged in the collection of these penalties and
fines shall be considered as program income.
[50 FR 6121, Feb. 13, 1985, as amended at 63 FR 63974, Nov. 18, 1998; 64
FR 13324, Mar. 18, 1999]
Sec. 246.16 Distribution of funds.
(a) General. This paragraph describes the timeframes for
distribution of appropriated funds by the Department to participating
State agencies and the authority for the Secretary to use appropriated
funds for evaluation studies and demonstration projects.
(1) Authorized appropriations to carry out the provisions of this
section may be made not more than 1 year in advance of the beginning of
the fiscal year in which the funds shall become available for
disbursement to the State agencies. The funds shall remain available for
the purposes for which appropriated until expended.
(2) In the case of appropriations legislation providing funds
through the end of a fiscal year, the Secretary shall issue to State
agencies an initial allocation of funds provided under such legislation
not later than the expiration of the 15-day period beginning on the date
of the enactment and subsequent allocation of funds shall be issued not
later than the beginning of each of the second, third and fourth
quarters of the fiscal year.
(3) Allocations of funds pursuant to paragraph (a)(2) of this
section shall be made as follows: The initial allocation of funds to
State agencies shall include not less than \1/3\ of the appropriated
amounts for the fiscal year. The allocation of funds to be made not
later than the beginning of the second and third quarters shall each
include not less than \1/4\ of the appropriated amounts for the fiscal
year.
[[Page 375]]
(4) In the case of legislation providing funds for a period that
ends prior to the end of a fiscal year, the Secretary shall issue to
State agencies an initial allocation of funds not later than the
expiration of the 10-day period beginning on the date of enactment. In
the case of legislation providing appropriations for a period of not
more than 4 months, all funds must be allocated to State agencies except
those reserved by the Secretary to carry out paragraph (a)(6) of this
section.
(5) In any fiscal year unused amounts from a prior fiscal year that
are identified by the end of the first quarter of the fiscal year shall
be recovered and reallocated not later than the beginning of the second
quarter of the fiscal year. Unused amounts from a prior fiscal year that
are identified after the end of the first quarter of the fiscal year
shall be recovered and reallocated on a timely basis.
(6) Up to one-half of one percent of the sums appropriated for each
fiscal year, not to exceed $5,000,000, shall be available to the
Secretary for the purpose of evaluating Program performance, evaluating
health benefits, providing technical assistance to improve State agency
administrative systems, preparing reports on program participant
characteristics, and administering pilot projects, including projects
designed to meet the special needs of migrants, Indians, rural
populations, and to carry out technical assistance and research
evaluation projects for the WIC Farmers' Market Nutrition Program.
(b) Distribution and application of grant funds to State agencies.
Notwithstanding any other provision of law, funds made available to the
State agencies for the Program in any fiscal year will be managed and
distributed as follows:
(1) The State agency shall ensure that all Program funds are used
only for Program purposes. As a prerequisite to the receipt of funds,
the State agency shall have executed an agreement with the Department
and shall have received approval of its State Plan.
(2) Notwithstanding any other provision of law, all funds not made
available to the Secretary in accordance with paragraph (a)(6) of this
section shall be distributed to State agencies on the basis of funding
formulas which allocate funds to all State agencies for food costs and
NSA costs incurred during the fiscal year for which the funds had been
made available to the Department. Final State agency grant levels as
determined by the funding formula and State agency breastfeeding
promotion and support expenditure targets will be issued in a timely
manner.
(3) When may I transfer funds from one fiscal year to another?--(i)
Back spend authority. The State agency may back spend into the prior
fiscal year up to an amount equal to one percent of its current year
food grant and one percent of its current year NSA grant. Food funds
spent back may be used only for food costs incurred during the prior
fiscal year. NSA funds spent back may be used for either food or NSA
costs incurred during the prior fiscal year. With prior FNS approval,
the State agency may also back spend food funds up to an amount equal to
three percent of its current year food grant in a fiscal year for food
costs incurred in the prior fiscal year. FNS will approve such a request
only if FNS determines there has been a significant reduction in infant
formula cost containment savings that affected the State agency's
ability to maintain its participation level.
(ii) Spend forward authority. (A) The State agency may spend forward
NSA funds up to an amount equal to one percent of their total grant (NSA
plus food grants) in any fiscal year. These NSA funds spent forward may
be used only for NSA costs incurred in the next fiscal year. Any food
funds that the State agency converts to NSA funds pursuant to paragraph
(f) of this section (based on projected or actual participation
increases during a fiscal year) may not be spent forward into the next
fiscal year. With prior FNS approval, the State agency may spend forward
additional NSA funds up to an amount equal to one-half of one percent of
its total grant. These funds are to be used in the next fiscal year for
the development of a management information system, including an
electronic benefit transfer system.
[[Page 376]]
(B) Funds spent forward will not affect the amount of funds
allocated to the State agency for any fiscal year. Funds spent forward
must be the first funds expended by the State agency for costs incurred
in the next fiscal year.
(iii) Reporting requirements. In addition to obtaining prior FNS
approval for certain spend forward/back spending options, the State
agency must report to FNS the amount of all funds it already has or
intends to back spend and spend forward. The spending options must be
reported at closeout.
(c) Allocation formula. State agencies shall receive grant
allocations according to the formulas described in this paragraph. To
accomplish the distribution of funds under the allocation formulas,
State agencies shall furnish the Department with any necessary financial
and Program data.
(1) Use of participation data in the formula. Wherever the formula
set forth in paragraphs (c)(2) and (c)(3) of this section require the
use of participation data, the Department shall use participation data
reported by State agencies according to Sec. 246.25(b).
(2) How is the amount of NSA funds determined? The funds available
for allocation to State agencies for NSA for each fiscal year must be
sufficient to guarantee a national average per participant NSA grant,
adjusted for inflation. The amount of the national average per
participant grant for NSA for any fiscal year will be an amount equal to
the national average per participant grant for NSA issued for the
preceding fiscal year, adjusted for inflation. The inflation adjustment
will be equal to the percentage change between two values. The first is
the value of the index for State and local government purchases, as
published by the Bureau of Economic Analysis of the Department of
Commerce, for the 12-month period ending June 30 of the second preceding
fiscal year. The second is the best estimate that is available at the
start of the fiscal year of the value of such index for the 12-month
period ending June 30 of the previous fiscal year. Funds for NSA costs
will be allocated according to the following procedure:
(i) Fair share target funding level determination. For each State
agency, FNS will establish, using all available NSA funds, an NSA fair
share target funding level which is based on each State agency's average
monthly participation level for the fiscal year for which grants are
being calculated, as projected by FNS. Each State agency receives an
adjustment to account for the higher per participant costs associated
with small participation levels and differential salary levels relative
to a national average salary level. The formula shall be adjusted to
account for these cost factors in the following manner: 90 percent of
available funds shall provide compensation based on rates which are
proportionately higher for the first 15,000 or fewer participants, as
projected by FNS, and 10 percent of available funds shall provide
compensation based on differential salary levels, as determined by FNS.
(ii) Base funding level. To the extent funds are available and
subject to the provisions of paragraph (c)(2)(iv) of this section, each
State agency shall receive an amount equal to 100 percent of the final
formula-calculated NSA grant of the preceding fiscal year, prior to any
operational adjustment funding allocations made under paragraph
(c)(2)(iv) of this section. If funds are not available to provide all
State agencies with their base funding level, all State agencies shall
have their base funding level reduced by a pro-rata share as required by
the shortfall of available funds.
(iii) Fair share allocation. Any funds remaining available for
allocation for NSA after the base funding level required by paragraph
(c)(2)(ii) of this section has been completed and subject to the
provisions of paragraph (c)(2)(iv) of this section shall be allocated to
bring each State agency closer to its NSA fair share target funding
level. FNS shall make fair share allocation funds available to each
State agency based on the difference between the NSA fair share target
funding level and the base funding level, which are determined in
accordance with paragraphs (c)(2)(i) and (c)(2)(ii) of this section,
respectively. Each State agency's difference shall be divided by the sum
of the differences for all State agencies, to determine the percent
share of the available fair share allocation funds each State agency
shall receive.
[[Page 377]]
(iv) Operational adjustment funds. Each State agency's final NSA
grant shall be reduced by up to 10 percent, and these funds shall be
aggregated for all State agencies within each FNS region to form an
operational adjustment fund. The Regions shall allocate these funds to
State agencies according to national guidelines and shall consider the
varying needs of State agencies within the region.
(v) Operational level. The sum of each State agency's stability,
residual and operational adjustment funds shall constitute the State
agency's operational level. This operational level shall remain
unchanged for such year even if the number of Federally-supported
participants in the program at such State agency is lower than the
Federally-projected participation level. However, if the provisions of
paragraph (e)(2)(ii) of this section are applicable, a State agency will
have its operational level for NSA reduced in the immediately succeeding
fiscal year.
(3) Allocation of food benefit funds. In any fiscal year, any
amounts remaining from amounts appropriated for such fiscal year and
amounts appropriated from the preceding fiscal year after making
allocations under paragraph (a)(6) of this section and allocations for
nutrition services and administration (NSA) as required by paragraph
(c)(2) of this section shall be made available for food costs.
Allocations to State agencies for food costs will be determined
according to the following procedure:
(i) Fair share target funding level determination. (A) For each
State agency, FNS will establish a fair share target funding level which
shall be an amount of funds proportionate to the State agency's share of
the national aggregate population of persons who are income eligible to
participate in the Program based on the 185 percent of poverty
criterion. The Department will determine each State agency's population
of persons categorically eligible for WIC which are at or below 185% of
poverty, through the best available, nationally uniform, indicators as
determined by the Department. If the Commodity Supplemental Food Program
(CSFP) also operates in the area served by the WIC State agency, the
number of participants in such area participating in the CSFP but
otherwise eligible to participate in the WIC Program, as determined by
FNS, shall be deducted from the WIC State agency's population of income
eligible persons. If the State agency chooses to exercise the option in
Sec. 246.7(c)(2) to limit program participation to U.S. citizens,
nationals, and qualified aliens, FNS will reduce the State agency's
population of income eligible persons to reflect the number of aliens
the State agency declares no longer eligible.
(B) The Department may adjust the respective amounts of food funds
that would be allocated to a State agency which is outside the 48
contiguous states and the District of Columbia when the State agency can
document that economic conditions result in higher food costs for the
State agency. Prior to any such adjustment, the State agency must
demonstrate that it has successfully implemented voluntary cost
containment measures, such as improved vendor management practices,
participation in multi-state agency infant formula rebate contracts or
other cost containment efforts. The Department may use the Thrifty Food
Plan amounts used in the Food Stamp Program, or other available data, to
formulate adjustment factors for such State agencies.
(ii) Prior year grant level allocation. To the extent funds are
available, each State agency shall receive a prior year grant allocation
equal to its final authorized grant level as of September 30 of the
prior fiscal year. If funds are not available to provide all State
agencies with their full prior year grant level allocation, all State
agencies shall have their full prior year grant level allocation reduced
by a pro-rata share as required by the shortfall of available funds.
(iii) Inflation/fair share allocation. (A) If funds remain available
after the allocation of funds under paragraph (c)(3)(ii) of this
section, the funds shall be allocated as provided in this paragraph
(c)(3)(iii). First, FNS will calculate a target inflation allowance by
applying the anticipated rate of food cost inflation, as determined by
the Department, to the prior year grant
[[Page 378]]
funding level. Second, FNS will allocate 80 percent of the available
funds to all State agencies in proportionate shares to meet the target
inflation allowance. Third, FNS will allocate 20 percent of the
available funds to each State agency which has a prior year grant level
allocation, as determined in paragraph (c)(3)(ii) of this section and
adjusted for inflation as determined in this paragraph (c)(3)(iii),
which is still less than its fair share target funding level. The amount
of funds allocated to each State agency shall be based on the difference
between its prior year grant level allocation plus target inflation
funds and the fair share funding target level. Each State agency's
difference shall be divided by the sum of the differences for all such
State agencies, to determine the percentage share of the 20 percent of
available funds each State agency shall receive. In the event a State
agency declines any of its allocation under either this paragraph
(c)(3)(iii) or paragraph (c)(3)(ii) of this section, the declined funds
shall be reallocated in the percentages and manner described in this
paragraph (c)(3)(iii). Once all State agencies receive allocations equal
to their full target inflation allowance, any remaining funds shall be
allocated or reallocated, in the manner described in this paragraph
(c)(3)(iii), to those State agencies still under their fair share target
funding level.
(B) In the event funds still remain after completing the
distribution in paragraph (c)(3)(iii)(A) of this section, these funds
shall be allocated to all State agencies including those with a
stability allocation at, or greater than, their fair share allocation.
Each State agency which can document the need for additional funds shall
receive additional funds based on the difference between its prior year
grant level and its fair share allocation. State agencies closest to
their fair share allocation shall receive first consideration.
(iv) Migrant services. At least \9/10\ of one percent of
appropriated funds for each fiscal year shall be available first to
assure service to eligible members of migrant populations. For those
State agencies serving migrants, a portion of the grant shall be
designated to each State agency for service to members of migrant
populations based on that State agency's prior year reported migrant
participation. The national aggregate amount made available first for
this purpose shall equal \9/10\ of one percent of all funds appropriated
each year for the Program.
(v) Special provisions for Indian State agencies. The Department may
choose to adjust the allocations and/or eligibles data among Indian
State agencies, or among Indian State agencies and the geographic State
agencies in which they are located when eligibles data for the State
agencies' population is determined to not fairly represent the
population to be served. Such allocations may be redistributed from one
State agency to another, based on negotiated agreements among the
affected State agencies approved by FNS.
(4) Adjustment for new State agencies. Whenever a State agency that
had not previously administered the program enters into an agreement
with the Department to do so during a fiscal year, the Department shall
make any adjustments to the requirements of this section that are deemed
necessary to establish an appropriate initial funding level for such
State agency.
(d) Distribution of funds to local agencies. The State agency shall
provide to local agencies all funds made available by the Department,
except those funds necessary for allowable State agency NSA costs and
food costs paid directly by the State agency. The State agency shall
distribute the funds based on claims submitted at least quarterly by the
local agency. Where the State agency advances funds to local agencies,
the State agency shall ensure that each local agency has funds to cover
immediate disbursement needs, and the State agency shall offset the
advances made against incoming claims as they are submitted to ensure
that funding levels reflect the actual expenditures reported by the
local agency. Upon receipt of Program funds from the Department, the
State agency shall take the following actions:
(1) Distribute funds to cover expected food cost expenditures and/or
distribute caseload targets to each local agency which are used to
project food cost expenditures.
[[Page 379]]
(2) Allocate funds to cover expected local agency NSA costs in a
manner which takes into consideration each local agency's needs. For the
allocation of NSA funds, the State agency shall develop an NSA funding
procedure, in cooperation with representative local agencies, which
takes into account the varying needs of the local agencies. The State
agency shall consider the views of local agencies, but the final
decision as to the funding procedure remains with the State agency. The
State agency shall take into account factors it deems appropriate to
further proper, efficient and effective administration of the program,
such as local agency staffing needs, density of population, number of
persons served, and availability of administrative support from other
sources.
(3) The State agency may provide in advance to any local agency any
amount of funds for NSA deemed necessary for the successful commencement
or significant expansion of program operations during a reasonable
period following approval of a new local agency, a new cost containment
measure, or a significant change in an existing cost containment
measure.
(e) Recovery and reallocation of funds. (1) Funds may be recovered
from a State agency at any time the Department determines, based on
State agency reports of expenditures and operations, that the State
agency is not expending funds at a rate commensurate with the amount of
funds distributed or provided for expenditures under the Program.
Recovery of funds may be either voluntary or involuntary in nature. Such
funds shall be reallocated by the Department through application of
appropriate formulas set forth in paragraph (c) of this section.
(2) Performance standards. The following standards shall govern
expenditure performance.
(i) The amount allocated to any State agency for food benefits in
the current fiscal year shall be reduced if such State agency's food
expenditures for the preceding fiscal year do not equal or exceed 97
percent of the amount allocated to the State agency for such costs. Such
reduction shall equal the difference between the State agency's
preceding year food expenditures and the performance expenditure
standard amount. For purposes of determining the amount of such
reduction, the amount allocated to the State agency for food benefits
for the preceding fiscal year shall not include food funds expended for
food costs incurred under the spendback provision in paragraph (b)(3)(i)
of this section or conversion authority in paragraph (g) of this
section. Temporary waivers of the performance standard may be granted at
the discretion of the Department.
(ii) Reduction of NSA grant. FNS will reduce the State agency's NSA
grant for the next fiscal year if the State agency's current fiscal year
per participant NSA expenditure is more than 10 percent higher than its
per participant NSA grant. To avoid a reduction to its NSA grant level,
the State agency may submit a ``good cause'' justification explaining
why it exceeded the applicable limit on excess NSA expenditures. This
justification must be submitted at the same time as the close-out report
for the applicable fiscal year. Good cause may include dramatic and
unforeseen increases in food costs, which would prevent a State agency
from meeting its projected participation level.
(iii) Spend forward funds. If any State agency notifies the
Department of its intent to spend forward a specific amount of funds for
expenditure in the subsequent fiscal year, in accordance with paragraph
(b)(3)(ii) of this section, such funds shall not be subject to recovery
by the Department.
(f) How do I qualify to convert food funds to NSA funds based on
increased participation?--(1) Requirements. The State agency qualifies
to convert food funds to NSA funds based on increased participation in
any fiscal year in two ways:
(i) Approved plan. A State agency may submit a plan to FNS to reduce
average food costs per participant and to increase participation above
the FNS-projected level for the State agency. If approved, the State
agency may use funds allocated for food costs to pay NSA costs.
(ii) Participation increases achieved. The State agency may also
convert food funds to NSA funds in any fiscal year if it achieves,
through acceptable
[[Page 380]]
measures, increases in participation in excess of the FNS-projected
level for the State agency. Acceptable measures include use of cost
containment measures, curtailment of vendor abuse, and breastfeeding
promotional activities. FNS will disallow the State agency's conversion
of food funds to NSA funds in accordance with paragraph (h) of this
section if:
(A) The State agency increases its participation level through
measures that are not in the nutritional interests of participants; or
(B) It is not otherwise allowable under program regulations.
(2) Limitation. The State agency may convert food funds only to the
extent that the conversion is necessary--
(i) To cover NSA expenditures in the current fiscal year that exceed
the State agency's NSA grant for the current fiscal year and any NSA
funds which the State agency has spent forward into the current fiscal
year; and
(ii) To ensure that the State agency maintains the level established
for the per participant NSA grant for the current fiscal year.
(3) Maximum amount. The maximum amount the State agency may convert
equals the State agency's conversion rate times the projected or actual
participation increase, as applicable. The conversion rate is the same
as the per participant NSA grant and is determined by dividing the State
agency's NSA grant by the FNS-projected participation level. The NSA
grant used in the calculation equals the initial allocation of current
year funds plus the operational adjustment funding allocated to the
State agency for that fiscal year.
(g) How do I qualify to convert food funds to NSA funds for service
to remote Indian or Native villages?--(1) Eligible State agencies. Only
State agencies located in noncontiguous States containing a significant
number of remote Indian or Native villages qualify to convert food funds
to NSA funds under this paragraph (g) in any fiscal year.
(2) Limitation. In the current fiscal year, food funds may be
converted only to the extent necessary to cover expenditures incurred:
(i) In providing services (including the full cost of air
transportation and other transportation) to remote Indian or Native
villages; and
(ii) To provide breastfeeding support in those areas that exceed the
State agency's NSA grant for the current fiscal year and any NSA funds
which the State agency has spent forward into the current fiscal year.
(h) What happens at the end of the fiscal year in which food funds
are converted? At the end of the fiscal year, the Department will
determine the amount of food funds which the State agency was entitled
to convert to NSA funds under paragraphs (f) and (g) of this section. In
the event that the State agency has converted more than the permitted
amount of funds, the Department will disallow the amount of excess
conversion.
(i) How do converted funds affect the calculation of my prior year
food grant and base NSA grant? For purposes of establishing a State
agency's prior year food grant and base NSA grant under paragraphs
(c)(2)(i) and (c)(3)(i) of this section, respectively, amounts converted
from food funds to NSA funds under paragraphs (f) and (g) of this
section and Sec. 246.14(e) during the preceding fiscal year will be
treated as though no conversion had taken place.
[50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21237, June 4, 1987; 52
FR 25190, July 2, 1987; 53 FR 2221, Jan. 27, 1988; 53 FR 25315, July 6,
1988; 54 FR 18091, Apr. 27, 1989, 54 FR 19486, May 5, 1989; 58 FR 51568,
Oct. 4, 1993; 59 FR 11504, Mar. 11, 1994; 59 FR 50823, Oct. 6, 1994; 63
FR 63974, Nov. 18, 1998; 64 FR 56674, Oct. 21, 1999; 64 FR 61016, Nov.
9, 1999; 64 FR 68000, Dec. 6, 1999; 65 FR 51224, Aug. 23, 2000; 65 FR
53528, Sept. 5, 2000; 65 FR 77771, Dec. 13, 2000; 65 FR 80281, Dec. 21,
2000]
Sec. 246.16a Infant formula cost containment.
(a) Who must use cost containment procedures for infant formula? All
State agencies must continuously operate a cost containment system for
infant formula that is implemented in accordance with this section
except:
(1) State agencies with home delivery or direct distribution food
delivery systems;
(2) Indian State agencies with 1,000 or fewer participants in April
of any fiscal year, which are exempt for the following fiscal year;
[[Page 381]]
(3) State agencies granted a waiver under paragraph (e) of this
section; and
(4) State agencies granted a postponement under paragraph (f) of
this section.
(b) What cost containment procedures must be used? State agencies
must use either a single-supplier competitive system as outlined in
paragraph (c) of this section, or an alternative cost containment system
as outlined in paragraph (d) of this section.
(c) What is the single-supplier competitive system? Under the
single-supplier competitive system, a State agency solicits sealed bids
from infant formula manufacturers to supply and provide a rebate for
infant formulas. The State agency must conduct the procurement in a
manner that maximizes full and open competition consistent with the
requirements of this section.
(1) How must a State agency structure the bid solicitation? (i)
Single solicitation. Under the single solicitation system, the State
agency's bid solicitation must require the winning bidder to supply and
provide a rebate on all infant formulas it produces that the State
agency chooses to issue, except exempt infant formulas. Rebates must
also be paid on any new infant formulas that are introduced after the
contract is awarded. The solicitation must require bidders that do not
produce a soy-based infant formula to subcontract with another
manufacturer to supply a soy-based infant formula under the contract. In
this case, the bid solicitation must require that the winning bidder pay
the State agency a rebate on the soy-based infant formula supplied by
the subcontractor that is issued by the State agency. The bid
solicitation must require all rebates (including those for soy-based
infant formula supplied by a subcontractor) to be calculated in
accordance with paragraph (c)(5) of this section. All of these infant
formulas are called contract brand infant formulas.
(ii) Separate solicitations. Under the separate solicitation system,
a State agency issues two bid solicitations. The first solicitation must
require the winning bidder to supply and provide a rebate on all milk-
based infant formulas it produces that the State agency chooses to
issue, except exempt infant formulas. Rebates must also be paid on any
new milk-based infant formulas that are introduced by the manufacturer
after the contract is awarded. These infant formulas are considered to
be contract brand infant formulas. The second bid solicitation must
require the winning bidder to supply and provide a rebate on all soy-
based infant formulas it produces that the State agency chooses to
issue. Rebates must also be paid on any new soy-based infant formulas
that are introduced by the manufacturer after the contract is awarded.
These infant formulas are also considered to be contract brand infant
formulas.
(2) On what types and physical forms of infant formula must bids be
solicited? The bid solicitation must require bidders to specify a rebate
for each of the types and physical forms of infant formulas specified in
the following chart. These rebates apply proportionally to other infant
formulas produced by the winning bidder(s) (see paragraph (c)(5) of this
section). For purposes of this section the infant formula on which bids
are solicited is the primary contract brand infant formula.
------------------------------------------------------------------------
Physical forms of Infant formula
Type of infant formula infant formula requirements
------------------------------------------------------------------------
(i) For a single solicitation, the solicitation must require bidders to
specify a rebate amount for the following:
------------------------------------------------------------------------
A single milk-based infant Concentrated Meets requirements
formula (primary contract liquid, under Sec.
brand infant formula); powdered, and 246.10(c)(1)(i) and
bidders must specify the ready-to-feed. suitable for routine
brand name of the milk-based issuance to the
infant formula for which the majority of
rebate is being specified. generally healthy,
full-term infants.
------------------------------------------------------------------------
(ii) For separate solicitations, the solicitation must require bidders
to specify a rebate amount for the following:
------------------------------------------------------------------------
(A) A single milk-based infant Concentrated Meets requirements
formula (primary milk-based liquid, under Sec.
contract brand infant powdered, and 246.10(c)(1)(i) and
formula); bidders must ready-to-feed. suitable for routine
specify the brand name of the issuance to the
milk-based infant formula for majority of
which the rebate is being generally healthy,
specified. full-term infants.
------------------------------------------------------------------------
[[Page 382]]
(B) A single soy-based infant Concentrated Meets requirements
formula (primary soy-based liquid, under Sec.
contract brand infant powdered, and 246.10(c)(1)(i).
formula); bidders must ready-to-feed.
specify the brand name of the
soy-based infant formula for
which the rebate is being
specified.
------------------------------------------------------------------------
(3) How are contracts awarded? A State agency must award the
contract(s) to the responsive and responsible bidder(s) offering the
lowest total monthly net price for infant formula or the highest monthly
rebate (subject to paragraph (c)(3)(ii) of this section) for a
standardized number of units of infant formula. The State agency must
calculate the lowest net price using the lowest national wholesale cost
per unit for a full truckload of the infant formula on the date of the
bid opening.
(i) Calculating the standardized number of units of infant formula.
The State agency must specify a standardized number of units (e.g.,
cans) of infant formula by physical form (e.g., concentrated liquid,
powdered, and ready-to-feed) to be bid upon. The standardized number of
units must contain the equivalent of the total number of ounces by
physical form needed to give the maximum allowance to the average
monthly number of infants using each form. The number of infants does
not include infant participants who are exclusively breastfed and those
who are issued exempt infant formula. The average monthly number of
infant using each physical form must be based on at least 6 months of
the most recent participation and issuance data. In order to calculate
the standardized number of units of infant formula by form to be bid
upon, the average monthly number of infants using each physical form is
multiplied by the maximum monthly allowable number of ounces for each
form (as allowed under Sec. 246.10(c)(1)(vi)), and divided by the
corresponding unit size (i.e., number of ounces per unit being bid). In
order to compare bids, total cost is calculated by multiplying this
standardized number of units by the net price for each physical form.
Alternative calculations that arrive at a mathematically equivalent
result are acceptable.
(ii) Determining the lowest total monthly net price or highest
rebate. To determine the lowest total monthly net price a State agency
must multiply the net price per unit by the established standardized
amount of infant formula to be bid upon as calculated in paragraph
(c)(3)(i) of this section. If the bid evaluation is based on highest
rebate offered, the State agency must multiply the rebate offered by the
established amount of infant formula to be bid upon as calculated in
paragraph (c)(3)(i) of this section.
(iii) Highest rebate limitation. Before issuing the bid
solicitation, a State agency that elects to evaluate bids by highest
rebate must demonstrate to FNS' satisfaction that the weighted average
retail prices for different brands of infant formula in the State vary
by 5 percent or less. The weighted average retail price must take into
account the prices charged for each type and physical form of infant
formula by authorized vendors or, if a State agency elects, it may
include stores that do not participate in the WIC program in the State.
The State agency must also base calculations on the proportion of each
type and physical form of infant formula the State agency issues based
on the data provided to bidders pursuant to paragraph (c)(4) of this
section.
(4) What data must be provided to bidders? The State agency must
provide as part of the bid solicitation the participation and infant
formula usage data and the standardized number of ounces by physical
form of infant formula to be used in evaluating bids as described in
paragraph (c)(3) of this section. The State agency must notify bidders
that the participation and infant formula usage data does not
necessarily reflect the actual issuance and redemption that will occur
under the contract.
(5) How is the rebate to be calculated on all other contract brand
infant formulas?
[[Page 383]]
All bids must specify the rebates offered by each bidder for the primary
contract brand infant formula(s). After the contract is awarded, the
State agency must calculate the percentage discount for all other
contract brand infant formulas (i.e., all other infant formulas produced
by the bidder other than exempt infant formulas) approved for issuance
by the State agency. The State agency must use the following method in
calculating the rebates:
(i) Calculation of percentage discounts. Rebates for contract brand
infant formulas, other than the primary contract brand infant formula(s)
for which bids were received, must be calculated by first determining
the percentage discount for each physical form (e.g., concentrated
liquid, powdered, and ready-to-feed) of the primary contract brand
infant formula(s). The percentage discount must be calculated by
dividing the rebate for the primary contract brand infant formula by the
manufacturer's lowest national wholesale price per unit, as of the date
of the bid opening, for a full truckload of the primary contract infant
formula. The percentage discounts must be used to determine the rebate
for all other contract brand infant formulas approved for issuance by
the State agency.
(ii) Calculation of rebate amount. The rebate for each type and form
of all other contract brand infant formulas must be calculated by
multiplying the percentage discount by the manufacturer's lowest
national wholesale price per unit, as of the date of the bid opening,
for a full truckload of the other contract brand infant formula. The
percentage discount used for each of the other contract brand infant
formulas depends on the physical form of the infant formula. For
example, if the percentage discount provided for the primary contract
brand powdered infant formula is 80 percent of its wholesale price, the
same percentage discount must be applied to all other contract brand
powdered infant formulas. The rebate for any types or forms of contract
brand infant formulas that are introduced during the contract period
must be calculated using the wholesale prices of these new contract
brand infant formulas at the time the infant formulas are approved for
issuance by the State agency.
(iii) Calculation of rebates during contract term. The rebates
resulting from the application of the percentage discount must remain
the same throughout the contract period except for the inflation
adjustments required in paragraph (c)(5)(iv) of this section.
(iv) Inflation provisions. Bid solicitations must require the
manufacturer to adjust for price changes subsequent to the bid opening.
The inflation provision may require either a cent-for-cent increase in
the rebate amounts whenever there is any change in the lowest national
wholesale price for a full truckload of the particular infant formula,
or may require another equally effective cost adjustment mechanism for
inflation as established by the State agency in the bid solicitation.
(6) Does a State agency have to approve the issuance of all contract
brand infant formulas? No, the State agency may choose to approve for
issuance, in addition to the primary contract brand infant formula(s),
none, some, or all of the winning bidder's other infant formula(s). In
addition, the State agency may require medical documentation before
issuing any contract brand infant formula (see Sec. 246.10(c)(1)(i))
and must require medical documentation before issuing any WIC formula
covered by Sec. 246.10(c)(1)(iii).
(d) What is an alternative cost containment system? Under an
alternative cost containment system, a State agency elects to implement
an infant formula cost containment system of its choice. The State
agency may only implement an alternative system if such a system
provides a savings equal to or greater than a single-supplier
competitive system. A State agency must conduct a cost comparison
demonstrating such savings as described in paragraphs (d)(1) and (d)(2)
of this section.
(1) How must the State agency structure the bid solicitation? The
State agency must solicit bids simultaneously using the single-supplier
competitive system described in paragraph (c) of this section and the
alternative cost containment system(s) the State agency has selected.
The State agency may prescribe standards of its choice for the
alternative cost containment system(s),
[[Page 384]]
provided that conditions established for each system addressed in the
bid solicitation include identical bid specifications for the contract
period length and the types and forms of infant formula(s) to be
included in the systems. In addition, the alternative cost containment
system must cover the types and forms of infant formulas routinely
issued to the majority of generally healthy, full-term infants. The
State agency must use the procedure outlined in paragraph (d)(2) of this
section in conducting a cost comparison to determine which system offers
the greatest savings over the entire contract period specified in the
bid solicitation.
(2) How does the State agency conduct the cost comparison? (i)
Establishing infant formula cost containment savings. (A) Savings under
the single-supplier competitive system. The State agency must project
food cost savings in the single-supplier competitive system based on the
lowest monthly net price or highest monthly rebate, as described in
paragraph (c)(3) of this section.
(B) Savings under an alternative cost containment system. The State
agency must project food cost savings under alternative cost containment
systems based on the lowest monthly net cost or highest monthly rebate,
as described in paragraph (c)(3) of this section. Food cost savings must
be based on the standardized amount of infant formula expected to be
issued as calculated for a single-supplier competitive system, prorated
by the percentage of anticipated total infant formula purchases
attributable to each manufacturer. The State agency must use the
aggregate market share of the manufacturers submitting bids in
calculating its cost savings estimate.
(C) General. In establishing the potential food cost savings under
each system, the State agency must take into consideration in its
estimate of savings any inflation factors which would affect the amount
of savings over the life of the contract. Further, the State agency must
not subtract any loss of payments which would occur under the terms of a
current contract as a result of any State agency action to be effective
after expiration of the contract.
(ii) Nutrition services and administration cost adjustment. The
State agency must deduct from the food cost savings projected for each
system under this paragraph (d) the nutrition services and
administration costs associated with developing and implementing--but
not operating--each cost containment system. This includes any
anticipated costs for modifying its automated data processing system or
components of its food delivery system(s), and of training participants,
local agencies, vendors, and licensed health care professionals on the
purpose and procedures of the new system. For contracts of two years or
less, such costs must be proportionately distributed over at least a two
year period. The State agency must not deduct any costs associated with
procurement. The State agency must itemize and justify all nutrition
services and administration cost adjustments as necessary and reasonable
for the development and implementation of each system.
(iii) Final cost comparison. The State agency must calculate the
food costs savings and deduct the appropriate nutrition services and
administration costs for each system for which bids were received. The
State agency must implement the single-supplier competitive system,
unless its comparative cost analysis shows that, over the length of the
contract stipulated in the bid solicitation, an alternative cost
containment system offers savings at least equal to, or greater than,
those under the competitive single-supplier system. If the comparative
cost analysis permits selection of the alternative cost containment
system and the State agency wishes to implement that system, it must
first submit a State Plan amendment with the calculations and supporting
documentation for this cost analysis to FNS for approval. Only after the
calculations are approved by FNS may the State agency award the contract
or contracts under the alternative cost containment system.
(e) How does a State agency request a waiver of the requirement for
a single-supplier competitive system? A State agency which, after
completing the cost comparison in paragraphs (d)(2)(i) through
(d)(2)(iii) of this section, is required to implement the single-
supplier competitive cost containment
[[Page 385]]
system for infant formula procurement, may request a waiver from FNS to
permit it to implement an alternative system. State agencies must
support all waiver requests with documentation in the form of a State
Plan amendment as required under Sec. 246.4(a)(14)(xi) and may submit
such requests only in either of the following circumstances:
(1) The difference between the single-supplier competitive system
and the alternative cost containment system is less than 3 percent of
the savings anticipated under the latter system and not more than
$100,000 per annum.
(2) The single-supplier competitive system would be inconsistent
with the efficient or effective operation of the program. Examples of
justifications FNS will not accept for a waiver, include, but are not
limited to: preservation of participant preference for otherwise
nutritionally equivalent infant formulas; maintenance of health care
professionals' prerogatives to prescribe otherwise nutritionally
equivalent infant formulas for non-medical reasons; potential loss of
free or otherwise discounted materials to WIC clinics and other health
care facilities; potential inability of a manufacturer selected in
accordance with applicable State procurement procedures to supply
contractually-specified amounts of infant formula; and the possibility
of interrupted infant formula supplies to retail outlets as a
consequence of entering into a contract with a single manufacturer.
(f) How does a State agency request a postponement of the
requirement for a continuously operated cost containment system for
infant formula? A State agency may request a postponement of the
requirement to continuously operate a cost containment system for infant
formula that has been implemented in accordance with this section.
However, a State agency may only request a postponement when it has
taken timely and responsible action to implement a cost containment
system before its current system expires but has been unable to do so
due to procurement delays, disputes with FNS concerning cost containment
issues during the State Plan approval process or other circumstances
beyond its control. The written postponement request must be submitted
to FNS before the expiration of the current system. The postponement
period may be no longer than 120 days. If a postponement is granted, the
State agency may extend, renew or otherwise continue an existing system
during the period of the postponement.
(g) May a State agency implement cost containment systems for other
supplemental foods? Yes, when a State agency finds that it is
practicable and feasible to implement a cost containment system for any
WIC food other than infant formula, the State agency must fully
implement that system in accordance with the time frames established by
the State agency and notification must be given to FNS by means of the
State agency's State Plan.
(h) What are the implementation time frames for Indian State
agencies that lose their exemption from the infant formula cost
containment requirement? If an Indian State agency operating a retail
food delivery system expands its program participation above 1000 and
thereby loses its exemption from the requirements of paragraph (a) of
this section regarding the method of cost containment for infant
formula, then the Indian State agency must begin compliance with
paragraph (a) of this section in accordance with time frames established
by FNS.
(i) What are the penalties for failure to comply with the cost
containment requirements? Any State agency that FNS determines to be out
of compliance with the cost containment requirements of this part must
not draw down on or obligate any Program grant funds, nor will FNS make
any further Program funds available to such State agency, until it is in
compliance with these requirements.
(j) What provisions are prohibited to be included in cost
containment contracts? A State agency may not issue bid solicitations or
enter into contracts which:
(1) Prescribe conditions that would void, reduce the savings under
or otherwise limit the original contract if the State agency solicited
or secured bids for, or entered into, a subsequent cost containment
contract to take effect after the expiration of the original contract;
[[Page 386]]
(2) Does not include the registration and certification requirements
in Sec. 246.10(f); or
(3) Require infant formula manufacturers to submit bids on more than
one of the systems specified in the invitation for bids.
(k) What are the requirements for the national cost containment bid
solicitation and selection for infant formula? FNS will solicit and
select bids for infant formula rebates on behalf of State agencies with
retail food delivery systems based on the following guidelines:
(1) FNS will solicit bids and select the winning bidder(s) for
infant formula cost containment contracts only if two or more State
agencies with retail food delivery systems request FNS to conduct bid
solicitation and selection on their behalf. FNS will conduct the bid
solicitation and selection process only and will not award or enter into
any infant formula cost containment contract on behalf of the individual
State agencies. Each State agency will individually award and enter into
infant formula cost containment contract(s) with the winning bidder(s).
State agencies must obtain the rebates directly from the infant formula
manufacturer(s). FNS will conduct the bid solicitation in accordance
with this paragraph (k) and the competitive bidding procurement
procedures of the State agency with the highest infant participation in
the bid group on whose behalf bids are being solicited. Any bid protests
and contractual disputes are the responsibility of the individual State
agencies to resolve.
(2) FNS will make a written offer to all State agencies to conduct
bid solicitation and selection on their behalf at least once every 12
months. FNS will send State agencies a copy of the draft Request for
Rebates when making the offer to State agencies. Only State agencies
that provide the information required by this paragraph (k)(2) in
writing, signed by a responsible State agency official, by certified
mail, return receipt requested or by hand delivery with evidence of
receipt within 15 days of receipt of the offer will be included in the
national bid solicitation and selection process. Each interested State
agency must provide:
(i) A statement that the State agency requests FNS to conduct bid
solicitation and selection on its behalf;
(ii) A statement of the State agency's minimum procurement
procedures applicable to competitive bidding (as defined in Sec. 246.2)
for infant formula cost containment contracts and supporting
documentation;
(iii) A statement of any limitation on the duration of infant
formula cost containment contracts and supporting documentation;
(iv) A statement of any contractual provisions required to be
included in infant formula cost containment contracts by the State
agency;
(v) The most recent available average monthly number of infant
participants less those infant participants who are exclusively
breastfed and those who are issued exempt infant formula. The average
monthly participation level must be based on at least 6 months of
participation data.
(vi) Infant formula usage rates by type (e.g., milk-based or soy-
based), form (e.g., concentrated, powdered, ready-to-feed), container
size, and supporting documentation;
(vii) A statement of the termination date of the State agency's
current infant formula cost containment contract; and
(viii) Any other related information that FNS may request.
(3) If FNS determines that the number of State agencies making the
request provided for in paragraph (k)(2) of this section so warrants,
FNS may, in consultation with such State agencies, divide such State
agencies into more than one group and solicit bids for each group. These
groups of State agencies are referred to as ``bid groups''. In
determining the size and composition of the bid groups, FNS will, to the
extent practicable, take into account the need to maximize the number of
potential bidders so as to increase competition among infant formula
manufacturers and the similarities in the State agencies' procurement
and contract requirements (as provided by the State agencies in
accordance with paragraphs (k)(2)(ii), (k)(2)(iii) and (k)(2)(iv) of
this section). FNS reserves the right to exclude a
[[Page 387]]
State agency from the national bid solicitation and selection process if
FNS determines that the State agency's procurement requirements or
contractual requirements are so dissimilar from those of the other State
agencies in any bid group that the State agency's inclusion in the bid
group could adversely affect the bids.
(4) For each bid group formed pursuant to paragraphs (k)(2) and
(k)(3) of this section, FNS will use for soliciting bids the competitive
bidding procurement procedures of the State agency in the group with the
highest infant participation. To the extent not inconsistent with the
requirements of this paragraph (k), FNS will use that set of procedures
in soliciting the bids for that bid group of State agencies. FNS will
notify each State agency in the bid group of the choice and provide them
each a copy of the procurement procedures of the chosen State agency.
Each State agency must provide FNS a written statement, signed by a
responsible State agency official, by certified mail, return receipt
requested or by hand delivery with evidence of receipt stating whether
that State agency is legally authorized to award an infant formula cost
containment contract pursuant to that set of procedures within 10 days
of the receipt of the notification. If the State agency determines it is
not legally authorized to award an infant formula cost containment
contract pursuant to those procedures, that State agency may not
continue in that round of the national bid solicitation and selection.
(5) At a minimum, in soliciting bids FNS will address the following:
(i) Unless FNS determines that doing so would not be in the best
interest of the Program, bids will be solicited for either:
(A) A single contract for each State agency under which the winning
bidder will be required to supply and provide rebates on all infant
formulas produced by that manufacturer (except exempt infant formulas)
that are issued by the State agency. If that manufacturer does not
produce a soy-based infant formula, the winning bidder will be required
to subcontract with another manufacturer for a soy-based infant formula
and the winning bidder will be required to pay a rebate on the soy-based
infant formula; or
(B) Two separate contracts for each State agency. Under the first
contract, the winning bidder will supply and provide a rebate on all the
milk-based infant formulas the winning bidder produces (except exempt
infant formulas) that are issued by the State agency and under the
second contract the winning bidder will supply and provide a rebate on
all the soy-based infant formulas the winning bidder produces (except
exempt infant formulas) that are issued by the State agency.
(ii) The infant formula cost containment contract(s) to be entered
into by the State agencies and infant formula manufacturers must provide
for a constant net price for infant formula for the full term of the
infant formula cost containment contract(s).
(iii) The duration of the infant formula cost containment contracts
for each bid group will be determined by FNS in consultation with the
State agencies. The term will be for a period of not less than 2 years,
unless the law applicable to a State agency regarding the duration of
infant formula cost containment contracts is more restrictive than this
paragraph (k)(5)(iii). In such cases, the term of the contract for only
that State agency will be for one year, with the option provided to the
State agency to extend the contract for a specified number of additional
years (to be determined by FNS in consultation with the State agency).
The date on which the individual State agencies' current infant formula
cost containment contracts terminate may vary, so the infant formula
cost containment contracts awarded by the State agencies within a bid
group may begin on different dates.
(iv) FNS will not prescribe conditions that are prohibited under
paragraph (j) of this section.
(v) FNS will solicit bids for rebates only from infant formula
manufacturers. FNS may limit advertising to contacting in writing each
infant formula manufacturer which has registered with the Secretary of
Health and Human Services under the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 321 et seq.).
[[Page 388]]
(6) FNS will select the winning bidder(s). The winning bidder(s)
will be the responsive and responsible bidder(s) meeting the
specifications and all bid terms and conditions which offers the lowest
net price weighted to take into account infant formula usage rates and
infant participation. In all instances the winning bidder(s) will be
those which singly or in combination yield the greatest aggregate
savings based on the net price weighted to take into account the infant
formula usage rates. To break a tie between 2 equally low bids, FNS will
select the bidder to be awarded the infant formula cost containment
contract by a drawing by lot limited to the bidders which submitted
those bids.
(7) Once FNS has conducted bid selection, a State agency may decline
to award the infant formula cost containment contract(s) only if the
State agency determines that awarding the contract(s) would not be in
the best interests of its Program, taking into account whether the
national bid solicitation and selection would achieve a lower aggregate
savings.
(8) As soon as practicable after selecting the winning bid(s), FNS
will notify the affected State agencies in writing of the bid results,
including the name(s) of the winning bidder(s). If a State agency
chooses to request approval to decline to award the infant formula cost
containment contract(s) in accordance with paragraph (k)(7) of this
section, it must notify FNS in writing, signed by a responsible State
agency official, together with supporting documentation, by certified
mail, return receipt requested or by hand delivery with evidence of
receipt within 10 days of the State agency's receipt of this
notification of bid results.
(9) If FNS approves any State agency's request to decline to award
the infant formula cost containment contract(s) in accordance with
paragraphs (k)(7) and (k)(8) of this section, FNS will notify the
bidders of the decision. If two or more State agencies remain in the
group, FNS will require the bidders to indicate in writing whether they
wish to withdraw or modify their bids within 5 days of receipt of this
notification. FNS will again permit State agencies to decline to award
the infant formula cost containment contract(s) in accordance with
paragraphs (k)(7) and (k)(8) of this section. If FNS approves these
additional State agency requests to decline contract awards, FNS may
conduct a resolicitation of bids in accordance with this paragraph (k).
[65 FR 51224, Aug. 23, 2000]
Sec. 246.17 Closeout procedures.
(a) General. State agencies shall submit preliminary and final
closeout reports for each fiscal year. All obligations shall be
liquidated before closure of a fiscal year grant. Obligations shall be
reported for the fiscal year in which they occur.
(b) Fiscal year closeout reports. State agencies--
(1) Shall submit to FNS, within 30 days after the end of the fiscal
year, preliminary financial reports which show cumulative actual
expenditures and obligations for the fiscal year, or part thereof, for
which Program funds were made available;
(2) Shall submit to FNS, within 150 days after the end of the fiscal
year, final fiscal year closeout reports;
(3) May submit revised closeout reports. FNS will reimburse State
agencies for additional costs claimed in a revised closeout report up to
the State's original grant level, if costs are properly justified and if
funds are available for the fiscal year pertaining to the request. FNS
will not be responsible for reimbursing State agencies for unreported
expenditures later than one year after the end of the fiscal year in
which they were incurred.
(c) Grant closeout procedures. When grants to State agencies are
terminated, the following procedures shall be performed in accordance
with 7 CFR part 3016.
(1) FNS may disqualify a State agency's participation under the
Program, in whole or in part, or take such remedies as may be legal and
appropriate, whenever FNS determines that the State agency failed to
comply with the conditions prescribed in this part, in its Federal-State
Agreement, or in FNS guidelines and instructions. FNS will promptly
notify the State agency in writing of the disqualification together with
the effective date. A State
[[Page 389]]
agency shall disqualify a local agency by written notice whenever it is
determined by FNS or the State agency that the local agency has failed
to comply with the requirements of the Program.
(2) FNS or the State agency may disqualify the State agency or
restrict its participation in the Program when both parties agree that
continuation under the Program would not produce beneficial results
commensurate with the further expenditure of funds. The State agency or
the local agency may disqualify the local agency or restrict its
participation in the Program under the same conditions. The two parties
shall agree upon the conditions of disqualification, including the
effective date thereof, and, in the case of partial disqualification,
the portion to be disqualified.
(3) Upon termination of a grant, the affected agency shall not incur
new obligations for the disqualified portion after the effective date,
and shall cancel as many outstanding obligations as possible. FNS will
allow full credit to the State agency for the Federal share of the
noncancellable obligations properly incurred by the State agency prior
to disqualification, and the State agency shall do the same for the
local agency.
(4) A grant closeout shall not affect the retention period for, or
Federal rights of access to, grant records as specified in Sec. 246.25.
The closeout of a grant does not affect the State or local agency's
responsibilities regarding property or with respect to any Program
income for which the State or local agency is still accountable.
(5) A final audit is not a required part of the grant closeout and
should not be needed unless there are problems with the grant that
require attention. If FNS considers a final audit to be necessary, it
shall so inform OIG. OIG will be resonsible for ensuring that necessary
final audits are performed and for any necessary coordination with other
Federal cognizant audit agencies or the State or local auditors. Audits
performed in accordance with Sec. 246.20 may serve as final audits
providing such audits meet the needs of requesting agencies. If the
grant is closed out without the audit, FNS reserves the right to
disallow and recover an appropriate amount after fully considering any
recommended disallowances resulting from an audit which may be conducted
later.
Sec. 246.18 Administrative review of State agency actions.
(a) Adverse actions subject to administrative reviews--(1) Vendor
appeals. (i) Adverse actions subject to full administrative reviews.
Except as provided elsewhere in paragraph (a)(1) of this section, the
State agency must provide full administrative reviews to vendors that
appeal the following adverse actions:
(A) denial of authorization based on the vendor selection criteria
for competitive price or for minimum variety and quantity of authorized
supplemental foods (Sec. 246.12(g)(3)(i) and (g)(3)(ii)) or on a
determination that the vendor is attempting to circumvent a sanction
(Sec. 246.12(g)(4));
(B) termination of an agreement for cause;
(C) disqualification; and
(D) imposition of a fine or a civil money penalty in lieu of
disqualification.
(ii) Adverse actions subject to abbreviated administrative reviews.
The State agency must provide abbreviated administrative reviews to
vendors that appeal the following adverse actions, unless the State
agency decides to provide full administrative reviews for any of these
types of adverse actions:
(A) denial of authorization based on the vendor selection criteria
for business integrity or for a current Food Stamp Program
disqualification or civil money penalty for hardship (Sec.
246.12(g)(3)(iii) and (g)(3)(iv));
(B) denial of authorization based on a State agency-established
vendor selection criterion if the basis of the denial is a WIC vendor
sanction or a Food Stamp Program withdrawal of authorization or
disqualification;
(C) denial of authorization based on the State agency's vendor
limiting criteria (Sec. 246.12(g)(2));
(D) denial of authorization because a vendor submitted its
application outside the timeframes during which applications are being
accepted and processed as established by the State agency under Sec.
246.12(g)(7);
[[Page 390]]
(E) termination of an agreement because of a change in ownership or
location or cessation of operations (Sec. 246.12(h)(3)(xvii));
(F) disqualification based on a trafficking conviction (Sec.
246.12(l)(1)(i));
(G) disqualification based on the imposition of a Food Stamp Program
civil money penalty for hardship (Sec. 246.12(l)(2)(ii)); and
(H) disqualification or a civil money penalty imposed in lieu of
disqualification based on a mandatory sanction imposed by another WIC
State agency (Sec. 246.12(l)(2)(iii)).
(iii) Actions not subject to administrative reviews. The State
agency may not provide administrative reviews pursuant to this section
to vendors that appeal the following actions:
(A) the validity or appropriateness of the State agency's vendor
limiting or selection criteria (Sec. 246.12(g)(2) and (g)(3));
(B) The validity or appropriateness of the State agency's vendor
peer group criteria and the criteria used to identify vendors that are
above-50-percent vendors or comparable to above-50-percent vendors;
(C) the validity or appropriateness of the State agency's
participant access criteria and the State agency's participant access
determinations;
(D) the State agency's determination whether a vendor had an
effective policy and program in effect to prevent trafficking and that
the ownership of the vendor was not aware of, did not approve of, and
was not involved in the conduct of the violation (Sec.
246.12(l)(1)(i)(B));
(E) denial of authorization if the State agency's vendor
authorization is subject to the procurement procedures applicable to the
State agency;
(F) the expiration of a vendor's agreement;
(G) disputes regarding food instrument payments and vendor claims
(other than the opportunity to justify or correct a vendor overcharge or
other error, as permitted by Sec. 246.12(k)(3); and
(H) disqualification of a vendor as a result of disqualification
from the Food Stamp Program (Sec. 246.12(l)(1)(vii)).
(2) Effective date of adverse actions against vendors. The State
agency must make denials of authorization and disqualifications imposed
under Sec. 246.12(l)(1)(i) effective on the date of receipt of the
notice of adverse action. The State agency must make all other adverse
actions effective no earlier than 15 days after the date of the notice
of the adverse action and no later than 90 days after the date of the
notice of adverse action or, in the case of an adverse action that is
subject to administrative review, no later than the date the vendor
receives the review decision.
(3) Local agency appeals--(i) Adverse actions subject to full
administrative reviews. Except as provided in paragraph (a)(3)(ii) of
this section, the State agency must provide full administrative reviews
to local agencies that appeal the following adverse actions:
(A) denial of a local agency's application;
(B) disqualification of a local agency; and
(C) any other adverse action that affects a local agency's
participation.
(ii) Actions not subject to administrative reviews. The State agency
may not provide administrative reviews pursuant to this section to local
agencies that appeal the following actions:
(A) expiration of the local agency's agreement; and
(B) denial of a local agency's application if the State agency's
local agency selection is subject to the procurement procedures
applicable to the State agency;
(iii) Effective date of adverse actions against local agencies. The
State agency must make denials of local agency applications effective
immediately. The State agency must make all other adverse actions
effective no earlier than 60 days after the date of the notice of the
adverse action and no later than 90 days after the date of the notice of
adverse action or, in the case of an adverse action that is subject to
administrative review, no later than the date the local agency receives
the review decision.
(b) Full administrative review procedures. The State agency must
develop procedures for a full administrative review of the adverse
actions listed in paragraphs (a)(1)(i) and (a)(3) of this
[[Page 391]]
section. At a minimum, these procedures must provide the vendor or local
agency with the following:
(1) Written notification of the adverse action, the procedures to
follow to obtain a full administrative review and the cause(s) for and
the effective date of the action. When a vendor is disqualified due in
whole or in part to violations in Sec. 246.12(l)(1), such notification
must include the following statement: ``This disqualification from WIC
may result in disqualification as a retailer in the Food Stamp Program.
Such disqualification is not subject to administrative or judicial
review under the Food Stamp Program.''
(2) The opportunity to appeal the adverse action within a time
period specified by the State agency in its notification of adverse
action.
(3) Adequate advance notice of the time and place of the
administrative review to provide all parties involved sufficient time to
prepare for the review.
(4) The opportunity to present its case and at least one opportunity
to reschedule the administrative review date upon specific request. The
State agency may set standards on how many review dates can be
scheduled, provided that a minimum of two review dates is allowed.
(5) The opportunity to cross-examine adverse witnesses. When
necessary to protect the identity of WIC Program investigators, such
examination may be conducted behind a protective screen or other device
(also referred to as an ``in camera'' examination).
(6) The opportunity to be represented by counsel.
(7) The opportunity to examine prior to the review the evidence upon
which the State agency's action is based.
(8) An impartial decision-maker, whose determination is based solely
on whether the State agency has correctly applied Federal and State
statutes, regulations, policies, and procedures governing the Program,
according to the evidence presented at the review. The State agency may
appoint a reviewing official, such as a chief hearing officer or
judicial officer, to review appeal decisions to ensure that they conform
to approved policies and procedures.
(9) Written notification of the review decision, including the basis
for the decision, within 90 days from the date of receipt of a vendor's
request for an administrative review, and within 60 days from the date
of receipt of a local agency's request for an administrative review.
These timeframes are only administrative requirements for the State
agency and do not provide a basis for overturning the State agency's
adverse action if a decision is not made within the specified timeframe.
(c) Abbreviated administrative review procedures. Except when the
State agency decides to provide full administrative reviews for the
adverse actions listed in paragraph (a)(1)(ii) of this section, the
State agency must develop procedures for an abbreviated administrative
review of the adverse actions listed in paragraph (a)(1)(ii) of this
section. At a minimum, these procedures must provide the vendor with the
following:
(1) Written notification of the adverse action, the procedures to
follow to obtain an abbreviated administrative review, the cause(s) for
and the effective date of the action, and an opportunity to provide a
written response; and
(2) A decision-maker who is someone other than the person who
rendered the initial decision on the action and whose determination is
based solely on whether the State agency has correctly applied Federal
and State statutes, regulations, policies, and procedures governing the
Program, according to the information provided to the vendor concerning
the cause(s) for the adverse action and the vendor's response; and
(3) Written notification of the review decision, including the basis
for the decision, within 90 days of the date of receipt of the request
for an administrative review. This timeframe is only an administrative
requirement for the State agency and does not provide a basis for
overturning the State agency's adverse action if a decision is not made
within the specified timeframe.
(d) Continuing responsibilities. Appealing an action does not
relieve a local agency or a vendor that is permitted to continue program
operations while its appeal is in process from the responsibility of
continued compliance with
[[Page 392]]
the terms of any written agreement with the State agency.
(e) Finality and effective date of decisions. The State agency
procedures must provide that review decisions rendered under both the
full and abbreviated review procedures are the final State agency
action. If the adverse action under review has not already taken effect,
the State agency must make the action effective on the date of receipt
of the review decision by the vendor or the local agency.
(f) Judicial review. If the review decision upholds the adverse
action against the vendor or local agency, the State agency must inform
the vendor or local agency that it may be able to pursue judicial review
of the decision.
[65 FR 83266, Dec. 29, 2000, as amended at 70 FR 71724, Nov. 29, 2005]
Subpart F_Monitoring and Review
Sec. 246.19 Management evaluation and monitoring reviews.
(a) Management evaluations and reviews. (1) FNS and each State
agency shall establish a management evaluation system in order to assess
the accomplishment of Program objectives as provided under this part,
FNS guidelines, instructions, and the Federal-State agreement with the
Department. FNS will provide assistance to States in discharging this
responsibility, establish standards and procedures to determine how well
the objectives of this part are being accomplished, and implement
sanction procedures as warranted by State Program performance.
(2) The State agency must submit a corrective action plan, including
implementation timeframes, within 60 days of receipt of an FNS
management evaluation report containing a finding that the State agency
did not comply with program requirements. If FNS determines through a
management evaluation or other means that during a fiscal year the State
agency has failed, without good cause, to demonstrate efficient and
effective administration of its program, or has failed to comply with
its corrective action plan, or any other requirements contained in this
part or the State Plan, FNS may withhold an amount up to 100 percent of
the State agency's nutrition services and administration funds for that
year.
(3) Sanctions imposed upon a State agency by FNS in accordance with
this section (but not claims for repayment assessed against a State
agency) may be appealed in accordance with the procedures established in
Sec. 246.22. Before carrying out any sanction against a State agency,
the following procedures will be followed:
(i) FNS will notify the Chief State Health Officer or equivalent in
writing of the deficiencies found and of FNS' intention to withhold
nutrition services and administration funds unless an acceptable
corrective action plan is submitted by the State agency to FNS within 60
days after mailing of notification.
(ii) The State agency shall develop a corrective action plan with a
schedule according to which the State agency shall accomplish various
actions to correct the deficiencies and prevent their future recurrence.
(iii) If the corrective action plan is acceptable, FNS will notify
the Chief State Health Officer or equivalent in writing within 30 days
of receipt of the plan. The letter approving the corrective action plan
will describe the technical assistance that is available to the State
agency to correct the deficiencies. The letter will also advise the
Chief State Health Officer or equivalent of the sanctions to be imposed
if the corrective action plan is not implemented according to the
schedule set forth in the approved plan.
(iv) Upon notification from the State agency that corrective action
as been taken, FNS will assess such action, and, if necessary, will
perform a follow-up review to determine if the noted deficiencies have
been corrected. FNS will then advise the State agency of whether the
actions taken are in compliance with the corrective action plan, and
whether the deficiency is resolved or further corrective action is
needed.
(v) If an acceptable corrective action plan is not submitted within
60 days, or if corrective action is not completed according to the
schedule established in the corrective action plan, FNS may withhold
nutrition services and administration funds through a reduction of the
State agency Letter of Credit or by
[[Page 393]]
assessing a claim against the State agency. FNS will notify the Chief
State Health Officer or equivalent of this action.
(vi) If compliance is achieved before the end of the fiscal year in
which the nutrition services and administration funds are withheld, the
funds withheld shall be restored to the State agency's Letter of Credit.
FNS is not required to restore funds withheld if compliance is not
achieved until the subsequent fiscal year. If the 60-day warning period
ends in the fourth quarter of a fiscal year, FNS may elect not to
withhold funds until the next fiscal year.
(b) State agency responsibilities. (1) The State agency shall
establish an on-going management evaluation system which includes at
least the monitoring of local agency operations, the review of local
agency financial and participation reports, the development of
corrective action plans to resolve Program deficiencies, the monitoring
of the implementation of corrective action plans, and on-site visits.
The results of such actions shall be documented.
(2) Monitoring of local agencies must encompass evaluation of
management, certification, nutrition education, participant services,
civil rights compliance, accountability, financial management systems,
and food delivery systems. If the State agency delegates the signing of
vendor agreements, vendor training, or vendor monitoring to a local
agency, it must evaluate the local agency's effectiveness in carrying
out these responsibilities.
(3) The State agency shall conduct monitoring reviews of each local
agency at least once every two years. Such reviews shall include on-site
reviews of a minimum of 20 percent of the clinics in each local agency
or one clinic, whichever is greater. The State agency may conduct such
additional on-site reviews as the State agency determines to be
necessary in the interest of the efficiency and effectiveness of the
program.
(4) The State agency must promptly notify a local agency of any
finding in a monitoring review that the local agency did not comply with
program requirements. The State agency must require the local agency to
submit a corrective action plan, including implementation timeframes,
within 60 days of receipt of a State agency report of a monitoring
review containing a finding of program noncompliance. The State agency
must monitor local agency implementation of corrective action plans.
(5) As part of the regular monitoring reviews, FNS may require the
State agency to conduct in-depth reviews of specified areas of local
agency operations, to implement a standard form or protocol for such
reviews, and to report the results to FNS. No more than two such areas
will be stipulated by FNS for any fiscal year and the areas will not be
added or changed more often than once every two fiscal years. These
areas will be announced by FNS at least six months before the beginning
of the fiscal year.
(6) The State agency shall require local agencies to establish
management evaluation systems to review their operations and those of
associated clinics or contractors.
[50 FR 6121, Feb. 13, 1985, as amended at 59 FR 11508, Mar. 11, 1994]
Sec. 246.20 Audits.
(a) Federal audit responsibilities. (1) OIG reserves the right to
perform audits of State and local agencies and other organizations
involved in the Program as determined by OIG to be necessary. In
performing such audits, OIG will rely to the extent feasible on audit
work performed by other Federal and non-Federal auditors.
(2) The State agency may take exception to particular audit findings
and recommendations. The State agency shall submit a response or
statement to FNS as to the action taken or a proposed corrective action
plan regarding the findings. A proposed corrective action plan developed
and submitted by the State agency shall include specific timeframes for
its implementation and for completion of correction of deficiencies and
their causes.
(3) FNS will determine whether Program deficiencies have been
adequately corrected. If additional corrective action is necessary, FNS
shall schedule a follow-up review, allowing a reasonable time for such
corrective action to be taken.
[[Page 394]]
(b) State audit responsibilities. (1) State agencies shall comply
with the provisions of 7 CFR part 3016 regarding independent
organization-wide audits of financial operations. In conformance with 7
CFR part 3016, State agencies shall arrange for independent audits of
financial operations, including compliance with appropriate provisions
of Federal laws and regulations, and shall ensure that audits are made
on an organization-wide basis rather than on a program basis. When
organization-wide audits are done the State agency shall cause
procedures to be established which ensure that FNS programs are included
in the universe of Federal awards from which a sample is drawn.
(2) Such organization-wide audits shall be used to determine
whether--
(i) Financial operations are conducted properly;
(ii) Financial statements are presented fairly;
(iii) State and local agencies are complying with the laws,
regulations and administrative requirements that affect the expenditure
of Federal funds;
(iv) State and local agencies have established internal procedures
to meet the financial management objectives of federally assisted
programs; and
(v) State and local agencies are providing accurate and reliable
information to the Federal government. If such agencies fail to arrange
for the required audits at the appropriate frequency or fail to ensure
that an acceptable audit is performed at the appropriate frequency, the
respective cognizant audit agencies may arrange for the performance of
the required audits. If the cognizant audit agencies arrange for the
required audits because of these circumstances, the State agencies shall
reimburse the respective cognizant audit agencies for the pro rata cost
of their organization-wide audits.
(3) Each State agency shall make all State or local agency sponsored
audit reports of Program operations under its jurisdiction available for
the Department's review upon request. The cost of these audits shall be
considered a part of nutrition services and administration costs and may
be funded from the State or local agency nutrition services and
administration funds, as appropriate. For purposes of determining the
Program's pro rata share of indirect costs associated with organization-
wide audits, the cost of food shall not be considered in the total
dollar amount of the Program.
Sec. 246.21 Investigations.
(a) Authority. The Department may make an investigation of any
allegation of noncompliance with this part and FNS guidelines and
instructions. The investigation may include, where appropriate, a review
of pertinent practices and policies of any State or local agency, the
circumstances under which the possible noncompliance with this part
occurred, and other factors relevant to a determination as to whether
the State or local agency has failed to comply with the requirements of
this part.
(b) Confidentiality. No State or local agency, participant, or other
person shall intimidate, threaten, coerce, or discriminate against any
individual for the purpose of interfering with any right or privilege
under this part because that person has made a complaint or formal
allegation, or has testified, assisted, or participated in any manner in
an investigation, proceeding, or hearing under this part. The identity
of every complainant shall be kept confidential except to the extent
necessary to carry out the purposes of this part, including the
conducting of any investigation, hearing, or judicial proceeding.
Subpart G_Miscellaneous Provisions
Sec. 246.22 Administrative appeal of FNS decisions.
(a) Right to appeal. When FNS asserts a sanction against a State
agency under the provisions of Sec. 246.19, the State agency may appeal
and must be afforded a hearing or review by an FNS Administrative Review
Officer. The right of appeal shall not apply to claims for repayment
assessed by FNS against the State agency under Sec. 246.23(a). A State
agency shall have the option of requesting a hearing to present its
position or a review of pertinent documents and records including any
additional written submission prepared by the State agency.
[[Page 395]]
(1) FNS will send a written notice by Certified Mail-Return Receipt
Requested to the state agency or otherwise ensure receipt of such notice
by the agency when asserting a sanction against a State agency as
specified in Sec. 246.19(a).
(2) A State agency aggrieved by a sanction asserted against it may
file a written request with the Director, Administrative Review
Division, U.S. Department of Agriculture, Food and Nutrition Service,
3101 Park Center Drive, Alexandria, Va. 22302, for a hearing or a review
of the record. Such request shall be sent by Certified Mail-Return
Receipt Requested and postmarked within 30 days of the date of receipt
of the sanction notice. The envelope containing the request shall be
prominently marked ``REQUEST FOR REVIEW OR HEARING.'' The request shall
clearly identify the specific FNS sanction(s) being appealed and shall
include a photocopy of the FNS notice of sanction. If the State agency
does not request a review of hearing within 30 days of receipt of the
notice, the administrative decision on the sanctions will be considered
final.
(b) Acknowledgment of request. Within 15 days of receipt by the
Director of the Administrative Review Division of a request for review
or hearing, the Director will provide the State agency with a written
acknowledgment of the request.
(1) The acknowledgment will include the name and address of the FNS
Administrative Review Officer to review the sanction;
(2) The acknowledgment will also notify the State agency that within
30 days of the receipt of the acknowledgment, the State agency shall
submit three sets of the following information to the Administrative
Review Officer--
(i) A clear, concise identification of the issue(s) in dispute;
(ii) The State agency's position with respect to the issue(s) in
dispute;
(iii) The pertinent facts and reasons in support of the State
agency's position with respect to the issue(s) in dispute and a copy of
the specific sanction notice provided by FNS;
(iv) All pertinent documents, correspondence and records which the
State agency believes are relevant and helpful toward a more thorough
understanding of the issue(s) in dispute;
(v) The relief sought by the State agency;
(vi) The identity of the person(s) presenting the State agency's
position when a hearing is involved; and
(vii) A list of prospective State agency witnesses when a hearing is
involved.
(c) FNS action. (1) When a hearing is requested pursuant to this
section, the Administrative Review Officer will, within 60 days after
receipt of the State agency's information, schedule and conduct the
hearing. The State agency will be advised of the time, date and location
of the hearing at least 10 days in advance.
(2) When a hearing is requested, the FNS Administrative Review
Officer will make a final determination within 30 days after the
hearing, and the final determination will take effect upon delivery of
the written notice of this final decision to the State agency.
(3) When a review is requested, the FNS Administrative Review
Officer will review information presented by a State agency and will
make a final determination within 30 days after receipt of that
information. The final determination will take effect upon delivery of
the written notice of this final decision to the State agency.
Sec. 246.23 Claims and penalties.
(a) Claims against State agencies. (1) If FNS determines through a
review of the State agency's reports, program or financial analysis,
monitoring, audit, or otherwise, that any Program funds provided to a
State agency for supplemental foods or nutrition services and
administration purposes were, through State or local agency negligence
or fraud, misused or otherwise diverted from Program purposes, a formal
claim will be assessed by FNS against the State agency. The State agency
shall pay promptly to FNS a sum equal to the amount of the nutrition
services and administration funds or the value of supplemental foods or
food instruments so misused or diverted.
(2) If FNS determines that any part of the Program funds received by
a State agency; or supplemental foods,
[[Page 396]]
either purchased or donated commodities; or food instruments, were lost
as a result of thefts, embezzlements, or unexplained causes, the State
agency shall, on demand by FNS, pay to FNS a sum equal to the amount of
the money or the value of the supplemental foods or food instruments so
lost.
(3) The State agency shall have full opportunity to submit evidence,
explanation or information concerning alleged instances of noncompliance
or diversion before a final determination is made in such cases.
(4) FNS will establish a claim against any State agency that has not
accounted for the disposition of all redeemed food instruments and taken
appropriate follow-up action on all redeemed food instruments that
cannot be matched against valid enrollment and issuance records,
including cases that may involve fraud, unless the State agency has
demonstrated to the satisfaction of FNS that it has:
(i) Made every reasonable effort to comply with this requirement;
(ii) Identified the reasons for its inability to account for the
disposition of each redeemed food instrument; and
(iii) Provided assurances that, to the extent considered necessary
by FNS, it will take appropriate actions to improve its procedures.
(b) Interest charge on claims against State agencies. If an
agreement cannot be reached with the State agency for payment of its
debts or for offset of debts on its current Letter of Credit within 30
days from the date of the first demand letter from FNS, FNS will assess
an interest (late) charge against the State agency. Interest accrual
shall begin on the 31st day after the date of the first demand letter,
bill or claim, and shall be computed monthly on any unpaid balance as
long as the debt exists. From a source other than the Program, the State
agency shall provide the funds necessary to maintain Program operations
at the grant level authorized by FNS.
(c) Claims--(1) Claims against participants. (i) Procedures. If the
State agency determines that program benefits have been obtained or
disposed of improperly as the result of a participant violation, the
State agency must establish a claim against the participant for the full
value of such benefits. For all claims, the State agency must issue a
letter demanding repayment. If full restitution is not made or a
repayment schedule is not agreed on within 30 days of receipt of the
letter, the State agency must take additional collection actions until
restitution is made or a repayment schedule is agreed on, unless the
State agency determines that further collection actions would not be
cost-effective. The State agency must establish standards, based on a
cost benefit analysis, for determining when collection actions are no
longer cost-effective. At the time the State agency issues the demand
letter, the State agency must advise the participant of the procedures
to follow to obtain a fair hearing pursuant to Sec. 246.9 and that
failure to pay the claim may result in disqualification. In addition to
establishing a claim, the State agency must determine whether
disqualification is required by Sec. 246.12(u)(2).
(ii) Types of restitution. In lieu of financial restitution, the
State agency may allow participants or parents or caretakers of infant
or child participants for whom financial restitution would cause undue
hardship to provide restitution by performing in-kind services
determined by the State agency. Restitution may not include offsetting
the claim against future program benefits, even if agreed to by the
participant or the parent or caretaker of an infant or child
participant.
(iii) Disposition of claims. The State agency must document the
disposition of all participant claims.
(2) Claims against the State agency. FNS will assert a claim against
the State agency for losses resulting from program funds improperly
spent as a result of dual participation, if FNS determines that the
State agency has not complied with the requirements in Sec.
246.7(l)(1).
(3) Delegation of claims responsibility. The State agency may
delegate to its local agencies the responsibility for collecting
participant claims.
(d) Penalties. In accordance with section 12(g) of the National
School Lunch Act, whoever embezzles, willfully misapplies, steals or
obtains by fraud any funds, assets or property provided
[[Page 397]]
under section 17 of the Child Nutrition Act of 1966, as amended, whether
received directly or indirectly from USDA, or whoever receives, conceals
or retains such funds, assets or property for his or her own interest,
knowing such funds, assets or property have been embezzled, willfully
misapplied, stolen, or obtained by fraud shall, if such funds, assets or
property are of the value of $100 or more, be fined not more than
$10,000 or imprisoned not more than five years, or both, or if such
funds, assets or property are of a value of less than $100, shall be
fined not more than $1,000 or imprisoned for not more than one year, or
both.
[50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21238, June 4, 1987; 65
FR 83288, Dec. 29, 2000]
Sec. 246.24 Procurement and property management.
(a) Requirements. State and local agencies shall ensure that
subgrantees comply with the requirements of 7 CFR part 3016, the
nonprocurement debarment/suspension requirements of 7 CFR part 3017, and
if applicable, the lobbying restrictions as required in 7 CFR part 3018
concerning the procurement and allowability of food in bulk lots,
supplies, equipment and other services with Program funds. These
requirements are adopted to ensure that such materials and services are
obtained for the Program in an effective manner and in compliance with
the provisions of applicable law and executive orders.
(b) Contractual responsibilities. The standards contained in A-130
and 7 CFR part 3016 do not relieve the State or local agency of the
responsibilities arising under its contracts. The State agency is the
responsible authority, without recourse to FNS, regarding the settlement
and satisfaction of all contractual and administrative issues arising
out of procurements entered into in connection with the Program. This
includes, but is not limited to, disputes, claims, protests of award,
source evaluation, or other matters of a contractual nature. Matters
concerning violation of law are to be referred to such local, State or
Federal authority as may have proper jurisdiction.
(c) State regulations. The State or local agency may use its own
procurement regulations which reflect applicable State and local
regulations, provided that procurements made with Program funds adhere
to the standards set forth in A-130 and 7 CFR part 3016.
(d) Property acquired with Program funds. State and local agencies
shall observe the standards prescribed in 7 CFR part 3016 in their
utilization and disposition of real property and equipment, including
automated data processing equipment, acquired in whole or in part with
Program funds.
[50 FR 6121, Feb. 13, 1985, as amended at 59 FR 11508, Mar. 11, 1994]
Sec. 246.25 Records and reports.
(a) Recordkeeping requirements. Each State and local agency shall
maintain full and complete records concerning Program operations. Such
records shall comply with 7 CFR part 3016 and the following
requirements:
(1) Records shall include, but not be limited to, information
pertaining to financial operations, food delivery systems, food
instrument issuance and redemption, equipment purchases and inventory,
certification, nutrition education, civil rights and fair hearing
procedures.
(2) All records shall be retained for a minimum of three years
following the date of submission of the final expenditure report for the
period to which the report pertains. If any litigation, claim,
negotiation, audit or other action involving the records has been
started before the end of the three-year period, the records shall be
kept until all issues are resolved, or until the end of the regular
three-year period, whichever is later. If FNS deems any of the Program
records to be of historical interest, it may require the State or local
agency to forward such records to FNS whenever either agency is
disposing of them.
(3) Records for nonexpendable property acquired in whole or in part
with Program funds shall be retained for three years after its final
disposition.
(4) All records, except medical case records of individual
participants (unless they are the only source of certification data),
shall be available during normal business hours for representatives of
the Department of the Comptroller General of the United States to
[[Page 398]]
inspect, audit, and copy. Any reports resulting from such examinations
shall not divulge names of individuals.
(b) Financial and participation reports--(1) Monthly reports. State
agencies shall submit financial and program performance data on a
monthly basis as specified by FNS. Such information may include, but
shall not be limited to, actual and projected participation, the number
of persons on waiting lists, and itemized nutrition services and
administration funds expenditures. State agencies shall require local
agencies to report such financial and participation information as is
necessary for the efficient management of food and nutrition services
and administration funds. When considered necessary and feasible by FNS,
State agencies may be required to:
(i) Show in the ``Remarks'' section of the Financial and
Participation Report the amount of cash allowances exceeding three days
need being held by their local agencies or contractors; and
(ii) Provide short narrative explanations of actions taken by the
State agency to reduce such excess balances.
(2) Quarterly reports. Quarterly, on dates specified by FNS, State
agencies shall report the number of persons participating in the Program
by category (i.e., pregnant, breastfeeding, and postpartum women,
infants and children) within each priority level as established in Sec.
246.7(e)(4).
(3) Program Participant Characteristic reports. State and local
agencies shall provide such information as may be required by FNS to
prepare reports on participant characteristics which includes, at a
minimum, information on breastfeeding incidence and duration, income and
nutritional risk characteristics of participants, and participation in
the Program by members of families of migrant farmworkers.
(c) Civil rights. The State agency shall ensure that each local
agency participating under the Program submits a report of racial and
ethnic participation data to the State agency, at a frequency prescribed
by FNS.
(d) Source documentation. To be acceptable for audit purposes, all
financial and Program performance reports shall be traceable to source
documentation.
(e) Certification of reports. Financial and Program reports shall be
certified as to their completeness and accuracy by the person given that
responsibility by the State agency.
(f) Use of reports. FNS will use State agency reports to measure
progress in achieving objectives set forth in the State Plan, and this
part, or other State agency performance plans. If it is determined,
through review of State agency reports, Program or financial analysis,
or an audit, that a State agency is not meeting the objectives set forth
in its State Plan, FNS may request additional information including, but
not limited to, reasons for failure to achieve its objectives.
(g) Extension of reporting deadline. FNS may extend the due date for
any Financial and Participation Report upon receiving a justified
request from the State agency. The State agency should not wait until
the due date if an extension is to be requested, but should submit the
request as soon as the need is known. Failure by a State agency to
submit a report by its due date may result in appropriate enforcement
actions by FNS in accordance with Sec. 246.19(a)(2), including
withholding of further grant payments, suspension or termination of the
grant.
[50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21238, June 4, 1987; 53
FR 15653, May 3, 1988; 59 FR 11508, Mar. 11, 1994; 65 FR 53528, Sept. 5,
2000]
Sec. 246.26 Other provisions.
(a) No aid reduction. The value of benefits or assistance available
under the Program shall not be considered as income or resources of
participants or their families for any purpose under Federal, State, or
local laws, including, but not limited to, laws relating to taxation,
welfare and public assistance programs.
(b) Statistical information. FNS reserves the right to use
information obtained under the Program in a summary, statistical or
other form which does not identify particular individuals.
(c) Medical information. FNS may require the State or local agencies
to supply medical data and other information collected under the Program
in a form that does not identify particular
[[Page 399]]
individuals, to enable the Secretary or the State agencies to evaluate
the effect of food intervention upon low-income individuals determined
to be at nutritional risk.
(d) Confidentiality of applicant and participant information. The
State agency shall restrict the use or disclosure of information
obtained from program applicants and participants to:
(1) Persons directly connected with the administration or
enforcement of the program, including persons investigating or
prosecuting violations in the WIC Program under Federal, State or local
authority;
(2) Representatives of public organizations designated by the chief
State health officer (or, in the case of Indian State agencies, the
governing authority) which administer health or welfare programs that
serve persons categorically eligible for the WIC Program. The State
agency shall execute a written agreement with each such designated
organization:
(i) Specifying that the receiving organization may employ WIC
Program information only for the purpose of establishing the eligibility
of WIC applicants and participants for health or welfare programs which
it administers and conducting outreach to WIC applicants and
participants for such programs, and
(ii) Containing the receiving organization's assurance that it will
not, in turn, disclose the information to a third party; and
(3) The Comptroller General of the United States for audit and
examination authorized by law.
(e) Confidentiality of vendor information. Confidential vendor
information is any information about a vendor (whether it is obtained
from the vendor or another source) that individually identifies the
vendor, except for vendor's name, address and authorization status.
Except as otherwise permitted by this section, the State agency must
restrict the use or disclosure of confidential vendor information to:
(1) Persons directly connected with the administration or
enforcement of the WIC Program or the Food Stamp Program who the State
agency determines have a need to know the information for purposes of
these programs. These persons may include personnel from its local
agencies and other WIC State and local agencies and persons
investigating or prosecuting WIC or Food Stamp Program violations under
Federal, State, or local law;
(2) Persons directly connected with the administration or
enforcement of any Federal or State law. Prior to releasing the
information to one of these parties (other than a Federal agency), the
State agency must enter into a written agreement with the requesting
party specifying that such information may not be used or redisclosed
except for purposes directly connected to the administration or
enforcement of a Federal, or State law; and
(3) A vendor that is subject to an adverse action, including a
claim, to the extent that the confidential information concerns the
vendor subject to the adverse action and is related to the adverse
action.
(f) Confidentiality of Food Stamp Program retailer information.
Except as otherwise provided in this section, the State agency must
restrict the use or disclosure of information about Food Stamp Program
retailers obtained from the Food Stamp Program, including information
provided pursuant to Section 9(c) of the Food Stamp Act of 1977 (7
U.S.C. 2018(c)) and Sec. 278.1(q) of this chapter, to persons directly
connected with the administration or enforcement of the WIC Program.
(g) USDA and the Comptroller General. The State agency must provide
the Department and the Comptroller General of the United States access
to all WIC Program records, including confidential vendor information,
pursuant to Sec. 246.25(a)(4).
[50 FR 6121, Feb. 13, 1985, as amended at 53 FR 35301, Sept. 13, 1988;
65 FR 83288, Dec. 29, 2000]
Sec. 246.27 Program information.
Any person who wishes information, assistance, records or other
public material shall request such information from the State agency, or
from the FNS Regional Office serving the appropriate State as listed
below:
(a) Connecticut, Maine, Massachusetts, New Hampshire, New York,
Rhode Island, Vermont: U.S. Department of Agriculture, FNS, Northeast
[[Page 400]]
Region, 10 Causeway Street, room 501, Boston, Massachusetts 02222-1066.
(b) Delaware, District of Columbia, Maryland, New Jersey,
Pennsylvania, Puerto Rico, Virginia, Virgin Islands, West Virginia: U.S.
Department of Agriculture, FNS, Mid-Atlantic Region, Mercer Corporate
Park, 300 Corporate Boulevard, Robbinsville, New Jersey 08691-1598.
(c) Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, Tennessee: U.S. Department of Agriculture,
FNS, Southeast Region, 77 Forsyth Street, SW., suite 112, Atlanta,
Georgia 30303.
(d) Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin: U.S.
Department of Agriculture, FNS, Midwest Region, 77 West Jackson
Boulevard--20th Floor, Chicago, Illinois 60604-3507.
(e) Arkansas, Louisiana, New Mexico, Oklahoma, Texas: U.S.
Department of Agriculture, FNS, Southwest Region, 1100 Commerce Street,
room 5-C-30, Dallas, Texas 75242.
(f) Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North
Dakota, South Dakota, Utah, Wyoming: U.S. Department of Agriculture,
FNS, Mountain Plains Region, 1244 Speer Boulevard, suite 903, Denver,
Colorado 80204.
(g) Alaska, American Samoa, Arizona, California, Guam, Hawaii,
Idaho, Nevada, Oregon, Trust Territory of the Pacific Islands, the
Northern Mariana Islands, Washington: U.S. Department of Agriculture,
FNS, Western Region, 550 Kearny Street, room 400, San Francisco,
California 94108.
[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 59
FR 11508, Mar. 11, 1994]
Sec. 246.28 OMB control numbers.
The following control numbers have been assigned to the information
collection requirements in 7 CFR part 246 by the Office of Management
and Budget pursuant to the Paperwork Reduction Act of 1980, Pub. L. 96-
511.
------------------------------------------------------------------------
Currrent
7 CFR part 246 section where requirements are described OMB control
no.
------------------------------------------------------------------------
.4(a) (8), (9), (11)....................................... 0584-0386
.5......................................................... 0584-0043
.6......................................................... 0584-0043
.7(a)...................................................... 0584-0386
.7(e), (h), (j)............................................ 0584-0043
.7(n)...................................................... 0584-0386
.7(i)...................................................... 0584-A536
.10........................................................ 0584-A536
.11(a)(3).................................................. 0584-0386
.11(d)..................................................... 0584-0043
.12(f), (i), (i)(3), (j)................................... 0584-0043
.14(d)(1).................................................. 0584-0043
.16(c)..................................................... 0584-0043
.17(c)(1).................................................. 0584-0043
.19........................................................ 0584-0043
.20(a)..................................................... 0584-0043
.25(a), (b)................................................ 0584-0043,
0584-0347
------------------------------------------------------------------------
[50 FR 6121, Feb. 13, 1985, as amended at 53 FR 15653, May 3, 1988; 54
FR 51295, Dec. 14, 1989; 58 FR 11507, Feb. 26, 1993]
PART 247_COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents
Sec.
247.1 Definitions.
247.2 The purpose and scope of CSFP.
247.3 Administering agencies.
247.4 Agreements.
247.5 State and local agency responsibilities.
247.6 State Plan.
247.7 Selection of local agencies.
247.8 Individuals applying to participate in CSFP.
247.9 Eligibility requirements.
247.10 Distribution and use of CSFP commodities.
247.11 Applicants exceed caseload levels.
247.12 Rights and responsibilities.
247.13 Provisions for non-English or limited-English speakers.
247.14 Other public assistance programs.
247.15 Notification of eligibility or ineligibility of applicant.
247.16 Certification period.
247.17 Notification of discontinuance of participant.
247.18 Nutrition education.
247.19 Dual participation.
247.20 Program violations.
247.21 Caseload assignment.
247.22 Allocation and disbursement of administrative funds to State
agencies.
247.23 State provision of administrative funds to local agencies.
247.24 Recovery and redistribution of caseload and administrative funds.
247.25 Allowable uses of administrative funds and other funds.
247.26 Return of administrative funds.
247.27 Financial management.
247.28 Storage and inventory of commodities.
247.29 Reports and recordkeeping.
247.30 Claims.
247.31 Audits and investigations.
[[Page 401]]
247.32 Termination of agency participation.
247.33 Fair hearings.
247.34 Management reviews.
247.35 Local agency appeals of State agency actions.
247.36 Confidentiality of applicants or participants.
247.37 Civil rights requirements.
Authority: Sec. 5, Pub. L. 93-86, 87 Stat. 249, as added by Sec.
1304(b)(2), Pub. L. 95-113, 91 Stat. 980 (7 U.S.C. 612c note); sec.
1335, Pub. L. 97-98, 95 Stat. 1293 (7 U.S.C. 612c note); sec. 209, Pub.
L. 98-8, 97 Stat. 35 (7 U.S.C. 612c note); sec. 2(8), Pub. L. 98-92, 97
Stat. 611 (7 U.S.C. 612c note); sec. 1562, Pub. L. 99-198, 99 Stat. 1590
(7 U.S.C. 612c note); sec. 101(k), Pub. L. 100-202; sec. 1771(a), Pub.
L. 101-624, 101 Stat. 3806 (7 U.S.C. 612c note); sec. 402(a), Pub. L.
104-127, 110 Stat. 1028 (7 U.S.C. 612c note); Pub. L. 107-171.
Source: 70 FR 47063, Aug. 11, 2005, unless otherwise noted.
Sec. 247.1 Definitions.
Following is a list of definitions that apply to the Commodity
Supplemental Food Program (CSFP).
Applicant means any person who applies to receive program benefits.
Applicants include program participants applying for recertification.
Breastfeeding women means women up to one year postpartum who are
breastfeeding their infants.
Caseload means the number of persons the State agency may serve on
an average monthly basis over the course of the caseload cycle.
Caseload cycle means the period from January 1 through the following
December 31.
Certification means the use of procedures to determine an
applicant's eligibility for the program.
Certification period means the period of time that a participant may
continue to receive program benefits without a review of his or her
eligibility.
Children means persons who are at least one year of age but have not
reached their sixth birthday.
Commodities means nutritious foods purchased by USDA to supplement
the diets of CSFP participants.
CSFP means the Commodity Supplemental Food Program.
Department means the U.S. Department of Agriculture.
Disqualification means the act of ending Program participation of a
participant as a punitive sanction.
Dual participation means simultaneous participation by an individual
in CSFP and the WIC Program, or in CSFP at more than one distribution
site.
Elderly persons means persons at least 60 years of age.
Fiscal year means the period from October 1 through the following
September 30.
FNS means the Food and Nutrition Service.
Infants means persons under one year of age.
Local agency means a public or private nonprofit agency, including
an Indian tribal organization, which enters into an agreement with the
State agency to administer CSFP at the local level.
Nonprofit agency means a private agency or organization with tax-
exempt status under the Internal Revenue Code, or that has applied for
tax-exempt status with the Internal Revenue Service.
Postpartum women means women up to one year after termination of
pregnancy.
Proxy means any person designated by a participant, or by the
participant's adult parent or caretaker, to obtain supplemental foods on
behalf of the participant.
7 CFR part 250 means the Department's regulations pertaining to the
donation of foods for use in USDA food distribution programs.
7 CFR part 3016 means the Department's regulations pertaining to
administrative requirements for grants and cooperative agreements with
State, local, and Indian tribal governments.
7 CFR part 3019 means the Department's regulations pertaining to
administrative requirements for grants and cooperative agreements with
nonprofit organizations.
7 CFR part 3052 means the Department's regulations pertaining to
audits of States, local governments, and nonprofit organizations.
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
the Trust Territory of the Pacific Islands, and the Northern Mariana
Islands.
[[Page 402]]
State agency means the agency designated by the State to administer
CSFP at the State level; an Indian tribe or tribal organization
recognized by the Department of the Interior that administers the
program for a specified tribe or tribes; or, the appropriate area office
of the Indian Health Service of the Department of Health and Human
Services.
State Plan means the document that describes the manner in which the
State agency intends to administer the program in the State.
Subdistributing agency means an agency or organization that has
entered into an agreement with the State agency to perform functions
normally performed by the State, such as entering into agreements with
eligible recipient agencies under which commodities are made available,
ordering commodities and/or making arrangements for the storage and
delivery of such commodities on behalf of eligible recipient agencies.
WIC Program means the Special Supplemental Nutrition Program for
Women, Infants, and Children.
Sec. 247.2 The purpose and scope of CSFP.
(a) How does CSFP help participants? Through CSFP, the Department
provides nutritious commodities to help State and local agencies meet
the nutritional needs of low-income pregnant, postpartum, and
breastfeeding women, infants under one year of age, children who are at
least one year of age but have not reached their sixth birthday, and
elderly persons. Through local agencies, each participant receives a
monthly package of commodities, based on food package guide rates
developed by FNS, with input from State and local agencies. Food
packages include such nutritious foods as infant formula and cereal,
juices, canned fruits and vegetables, canned meat or poultry and other
protein items, and grain products such as pasta, as well as other foods.
Participants also receive nutrition education.
(b) How many persons may be served in CSFP? State agencies may serve
eligible persons up to the caseload limit assigned to them by FNS.
Caseload is the number of persons that may be served on an average
monthly basis over the course of the caseload cycle, which extends from
January 1 through the following December 31.
Sec. 247.3 Administering agencies.
(a) What agencies are responsible for administering CSFP? CSFP is
administered at the Federal level by the Department's Food and Nutrition
Service (FNS), which provides commodities, assigns caseload, and
allocates administrative funds to State agencies. State agencies are
responsible for administering the program at the State level. The State
agency may select local agencies to administer the program in local
areas of the State. The State agency must provide guidance to local
agencies on all aspects of program operations. The State agency may also
select subdistributing agencies (e.g., another State agency, a local
governmental agency, or a nonprofit organization) to distribute or store
commodities, or to perform other program functions on behalf of the
State agency. Local or subdistributing agencies may also select other
agencies to perform specific program functions (e.g., food distribution
or storage), with the State agency's approval. Although the State agency
may select other organizations to perform specific activities, the State
agency is ultimately responsible for all aspects of program
administration.
(b) Are there specific functions that the State agency cannot
delegate to another agency? Yes. The State agency may not delegate the
performance of the following functions to another agency:
(1) Establishing eligibility requirements, in accordance with the
options provided to the State agency under Sec. 247.9; or
(2) Establishing a management review system and conducting reviews
of local agencies, in accordance with Sec. 247.34.
(c) What Federal requirements must State, subdistributing, and local
agencies follow in administering CSFP? State, subdistributing, and local
agencies must administer the program in accordance with the provisions
of this part, and with the provisions contained in part 250 of this
chapter, unless they
[[Page 403]]
are inconsistent with the provisions of this part.
Sec. 247.4 Agreements.
(a) What agreements are necessary for agencies to administer CSFP?
The following agreements are necessary for agencies to administer CSFP:
(1) Agreements between FNS and State agencies. Each State agency
must enter into an agreement with FNS (Form FNS-74, the Federal-State
Agreement) prior to receiving commodities or administrative funds;
(2) Agreements between State agencies and local or subdistributing
agencies. The State agency must enter into written agreements with local
or subdistributing agencies prior to making commodities or
administrative funds available to them. The agreements must contain the
information specified in paragraph (b) of this section. Agreements
between State and local agencies must also contain the information
specified in paragraph (c) of this section. Copies of all agreements
must be kept on file by the parties to the agreements; and
(3) Agreements between local and subdistributing agencies and other
agencies. The State agency must ensure that local and subdistributing
agencies enter into written agreements with other agencies prior to
making commodities or administrative funds available to these other
agencies. The agreements must contain the information specified in
paragraph (b) of this section. Copies of all agreements must be kept on
file by the parties to the agreements.
(b) What are the required contents of agreements? All agreements
described under paragraphs (a)(2) and (a)(3) of this section must
contain the following:
(1) An assurance that each agency will administer the program in
accordance with the provisions of this part and with the provisions of
part 250 of this chapter, unless they are inconsistent with the
provisions of this part;
(2) An assurance that each agency will maintain accurate and
complete records for a period of three years from the close of the
fiscal year to which they pertain, or longer if the records are related
to unresolved claims actions, audits, or investigations;
(3) A statement that each agency receiving commodities for
distribution is responsible for any loss resulting from improper
distribution, or improper storage, care, or handling of commodities;
(4) A statement that each agency receiving program funds is
responsible for any misuse of program funds;
(5) A description of the specific functions that the State,
subdistributing, or local agency is delegating to another agency; and
(6) A statement specifying:
(i) That either party may terminate the agreement by written notice
to the other; and
(ii) The minimum number of days of advance notice that must be
given. (The advance notification period must be at least 30 days.)
(c) What other assurances or information must be included in
agreements between State and local agencies? In addition to the
requirements under paragraph (b) of this section, agreements between
State and local agencies must contain the following:
(1) An assurance that the local agency will provide, or cause to be
provided, nutrition education to participants, as required in Sec.
247.18;
(2) An assurance that the local agency will provide information to
participants on other health, nutrition, and public assistance programs,
and make referrals as appropriate, as required in Sec. 247.14;
(3) An assurance that the local agency will distribute commodities
in accordance with the approved food package guide rate;
(4) An assurance that the local agency will take steps to prevent
and detect dual participation, as required in Sec. 247.19;
(5) The names and addresses of all certification, distribution, and
storage sites under the jurisdiction of the local agency; and
(6) An assurance that the local agency will not subject any person
to discrimination under the program on the grounds of race, color,
national origin, age, sex, or disability.
(d) What is the duration of required agreements? Agreements between
FNS
[[Page 404]]
and State agencies are considered permanent, but may be amended at the
initiation of State agencies or at the request of FNS. All amendments
must be approved by FNS. The State agency establishes the duration of
agreements it signs with local agencies or subdistributing agencies. The
State agency may establish, or permit the local or subdistributing
agency to establish, the duration of agreements between local or
subdistributing agencies and other agencies. However, State and local
agencies must comply with the requirements in Sec. 250.12(c) of this
chapter when entering agreements with other entities.
(Approved by the Office of Management and Budget under control numbers
0584-0067, 0584-0293)