Federal Food Services Programs: Regulations & Requirements for Charter School Authorizers

Federal Food Services Programs: Regulations & Requirements for Charter School Authorizers

Overview

This resource is a primer for authorizers, policymakers and advocates to understand the current regulations for participating in a federal food service program. Navigating the complex requirements of these programs is one of the major hurdles to equitable participation by charter schools, both because of the specialized knowledge needed by staff and the difficulty of operating a food services program in a financially sound manner at a small scale.

NACSA has created this resource in order to help authorizers understand the challenges charter schools face and to better equip stakeholders to assist schools navigate this important access and equity issue.

Note: Throughout this primer, NACSA uses the term “school,” which, in the case of a CMO or multi-campus charter school, would cover all schools managed by the same operator.

Eligibility for free and reduced price food services through the federal School Breakfast and National School Lunch Programs is determined in two ways: either individual students are eligible for the program through one of three pathways, or an entire school may be eligible through a relatively new community eligibility provision.

INDIVIDUAL STUDENT ELIGIBILITY

Students may be eligible for food services funding through three pathways:

Program Participation: the student participates in a federal program, including SNAP (Supplemental Nutrition Assistance Program), TANF (Temporary Assistance for Needy Families), or FDPIR (Food Distribution Program on Indian Reservations). Students are deemed automatically eligible if any member of the household participates in a federal assistance program (and/or a state-based assistance program the SEA has included in direct eligibility). Beginning in 2016-17, USDA began a pilot program with Medicaid/Medicare enrollment that is in use in 19 states.

Categorical Eligibility: the student falls within a statutorily-designated category, including Homeless, Migrant, Runaway, Foster, or enrollment in an eligible HeadStart or pre-K program. States may also include additional state-program-based categories.

Income Eligibility: student’s household meets threshold based on Federal Poverty Guidelines, which consider household size, with free meal eligibility a qualifying income below 130% of the federal poverty line and reduced-price meal eligibility between 130% and 185% of the federal poverty line. 

DIRECT ELIGIBILITY CERTIFICATION

Students eligible through the first two pathways above (Program Participation or Categorical Eligibility) may be directly certified “without further application,” meaning the child’s household is not required to complete an additional application or take further action, through the use of shared data exchanges between schools/SEAs and federal or state assistance programs. In recent years, USDA has taken a number of steps to encourage and better enable direct certification in recent years

INCOME APPLICATION CERTIFICATION

For students eligible through the third pathway (Income Application), schools must use information provided in the Income Application to make determinations as to: 1) the household size, and 2) the household income (see Verification below for more). USDA provides guidance, including for ‘special circumstances’ regarding who to include or exclude from the household and what to count towards or exclude from income.

COMMUNITY ELIGIBILITY PROVISION

Established and piloted in 2010, the Community Eligibility Provision (CEP) became universally available to all states in 2014-15 as an alternative method to calculating eligibility, with the goal of lowering administrative costs, maximizing participation, and allowing high-poverty schools to provide free breakfast and lunch service to all students.

Instead of measuring eligibility through categorical eligibility and income applications, a school is eligible for CEP if 40 percent or more of enrolled students are “Identified Students,” meaning automatically eligible through the Program Participation or Categorical Eligibility pathways (see Eligibility/Individual Student Eligibility above).

Instead of a per-student reimbursement, CEP schools are reimbursed at 1.6 times the “free meal” rate for all “Identified Students” and at the “paid meal” rate for all other enrolled students.

CEP participation offers a number of benefits for schools. Since CEP schools do not need to verify student eligibility through income applications, the administrative burden for the program is much lower. CEP also encourages and enables participation for students that do not categorically qualify but may qualify by income verification, without requiring the burden of applying. Finally, CEP also creates more financial stability and consistency in the school’s food service program.

Eligibility verification is only required when student participation is through the third pathway, Income Application Eligibility, not through either of the two direct eligibility pathways (Program Participation or Categorical Eligibility). Verification is also unnecessary if a school participates in the Community Eligibility Provision.

Though verification is ultimately the responsibility of families, as the consequence is a loss of meal benefits, LEAs must assist families as much as possible in the verification process. Verification may be necessary to confirm that the family meets the income thresholds, that the family does or does not receive qualifying assistance, or other application information, such as household size.

Unless the SEA has taken verification responsibility, LEAs must annually verify a sample of applications: LEAs must sample 3% of the pool of applications, or 3,000 applications, whichever is fewer.

LEAs must verify, on a case-by-case basis, applications that are “questionable,” meaning where the LEA has reason to believe information was omitted, falsified, or incomplete.

Students directly eligible through the first two pathways (Program Participation or Categorical Eligibility) can be "directly verified" through public agency records and shared data exchanges. LEAs are not required to use direct verification, however are encouraged to do so, and public agencies are encouraged and enabled to make the use of direct verification as streamlined as possible.

Beginning in 2017, all SFAs operating a National School Lunch or School Breakfast Program must have a written unpaid meal charge policy. In 2016, USDA Food and Nutrition Services (FNS) interpreted 7 CFR 245.5 & 210.12 to require SFAs to have written unpaid meal charge plans to meet requirements to inform families of the availability of free or reduced price lunches. Students qualifying for a free price meal may not be denied a qualifying meal if they have a negative balance from other purchases.

FNS issued additional guidance to assist operators avoid and overcome unpaid meal debts, including streamlining the application process, improving direct certification and verification, and providing flexibility around the effective date of eligibility.

Schools participating in the National School Lunch Program must offer “nutritious, well-balanced, and age-appropriate meals” and meet regulation-specified meal requirements and nutritional standards. School meals must meet both daily requirements, as well cumulative weekly requirements, laid out in a regulatory table.

Similar standards apply for schools participating in the School Breakfast Program: meals must meet daily and weekly nutritional standards.

USDA offers countless resources, including menu planning & nutritional analysis software, for school.

Schools must meet food and facility safety standards set forth in 7 CFR §210.13 and §210.15. Schools must comply with state and local sanitation and health standards, must undergo at least two food safety inspections annually, in additional to any further food safety inspections required by the state or local municipality, and must adopt and adhere to a school food safety program that covers the storage, preparation, and serving of food.

USDA directs schools to the Institute of Child Nutrition for additional resources on food safety.

Schools must comply with food service staff professional standards set forth in 7 CFR §210.30. Beginning in 2015, schools participating in the National School Lunch or School Breakfast Programs must establish and implement professional standards for all food service staff, including nutritional program directors and managers; standards must include:

  1. Hiring/educational standards (dependent on enrollment size)
  2. Continuing education/training requirements, which must cover program eligibility, certification, verification, nutrition, and health and safety standards (hour requirements depend on position and title of personnel)

Schools must comply with federal procurement rules, set forth in 7 CFR 210.21(a), when administering a food services program in the same manner the school would in participating in any federally-funded program, including:

  • Payment (2 CFR §200.305): Federal regulations require timely payment of funds from federal disbursement to the contracted entity in order to avoid accumulation of interest by the pass-through party (the school) on federal funds, as well as ensure federal funds are spent in a timely manner for the intended purpose.
  • Cost Principles (2 CFR Part 200, Subpart E): Schools must adopt procedures and principles for determining allowable costs, which should align with the school’s standard accounting practices.
  • Procurement Standards (2 CFR §200.318-323): Regulations require schools to adopt procurement standards that ensure that purchases comply with the school’s procedures, are necessary, are done through an open competition among vendors, are free of a conflict-of-interest, and are properly documented. Schools must also identify and follow one of four specific approved methods of procurement (micro-purchases, small purchases, sealed bids, or competitive proposals); a noncompetitive proposal method may be used, but only in select circumstances (2 CFR §200.320).

Schools must comply with regular reporting requirements, set forth in 7 CFR §210.15, to the state agency or distributing agency overseeing the meals program in order to ensure compliance with the program’s requirements. These reports are at the discretion of the overseeing agency, but can/should cover reimbursement claims, responses to corrective action plans, responses to audit findings, proof of food safety inspections, prices, and free and reduced price meal applications and verification. Schools participating in the meals services programs must also comply with records requirements spelled out in 7 CFR §210.15(b).

FEDERAL FOOD SERVICES PROGRAM PARTICIPATION

A school cannot contract with a Food Services Management Company (FSMC) to provide ‘a la carte’ food service unless the FSMC also provides free, reduced price, and paid reimbursable lunch service to all eligible students.

CONTRACT SCOPE

A contract between a school and a Food Services Management Company (FSMC) must comply with federal regulations, set forth in 7 CFR 210.16, intended to ensure the FSA retains ultimate responsibility for operating the food services program.

Regulations require that:

  1. The school monitors the program through regular on-site visits
  2. The school retains signature authority on any state and federal agreements
  3. The school maintains applicable health certifications and responsibility for compliance with State and local health and safety regulations
  4. The school convenes a school advisory committee to assist in menu planning
  5. The program complies with applicable State regulations on procurement and contracting (e.g. review of invitations to bid and proposed contracts)

Regulations also specifically guide certain terms of the contract:

  1. “Cost plus a percentage of the cost” and “cost plus a percentage of the income” fee arrangements are explicitly prohibited
  2. The FSMC must maintain all required records and such records shall be available for review by the school upon request
  3. If meals are prepared off-site, the FSMC maintains appropriate health certification for the off-site facility
  4. The school is not required to make payments for any food that is spoiled, does not meet federal nutritional requirements, or otherwise does not meet the terms of the contract
  5. Contracts can be for terms of no more than one year, with no more than four yearly options for renewal in one contract; contracts must be terminable by either party with 60-day notice

FSMC PROCUREMENT

Schools looking to contract with a Food Service Management Company (FSMC) must comply with all standard federal requirements around procurement (see Procurement above) as well as additional provisions specific to receiving bids from FSMCs set forth in 7 CFR 210.16(b).

RFPs must require inclusion of a sample 21-day menu, or require bidders to provide such a sample menu, that complies with program nutritional standards or the purposes of calculating cost estimates. If the school intends to subject an FSMC to sanctions or nonperformance, the RFP must explicitly include the specific sanctions available.

STUDENTS WITH DISABILITIES

Schools must comply with the USDA’s Non-Discrimination on the Basis of Handicap in Programs regulations, which incorporate federal requirements from several applicable federal laws covering the rights and protections afforded to students with disabilities.

In administering a food services program, these regulations require additional accommodations:

  • Meal Modifications: Schools must create and notify families of the process for requesting and accommodating meal modifications in accordance with 7 CFR 15b.7(a).
  • Meal Service Modifications: Schools must also make necessary accommodations to provide meal service to students with disabilities, which may include additional or specialized equipment, personnel, or training 7 CFR 15b.4(b)(2). 

DIETARY AND CULTURAL RESTRICTIONS

SFAs are encouraged and provided necessary flexibility to accommodate specialized requests including dietary and cultural/religious restrictions, such as protein and milk alternatives, in accordance with 7 CFR 210.10(m)(2) & (3).