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Process to Hold Commodity Deliveries

Nutrition Services Division Management Bulletin
Purpose: Policy

To: Food Distribution Program Recipient Agencies

Number: NSD-FDP-01-2011

Attention: Food Services Directors

Date: March 2011

Subject: Process to Hold Commodity Deliveries for Agencies with Chronic Delinquent Invoices

Reference: California State Administrative Manual (SAM) Section 8776.6

This Management Bulletin (MB) establishes a system whereby the Food Distribution Program (FDP) will place a hold on commodity deliveries until delinquent invoices are paid.

The FDP has allowed the delivery of United States Department of Agriculture (USDA) commodities to recipient agencies with chronic delinquent invoices (for shipping and handling of USDA commodities). The FDP has prepared this MB to stop this practice and encourage timely payment of invoices.

The Agreement for Distribution of Donated Food (Agreement) states that an agency will be charged a shipping and handling fee for each case or unit. Payments will be made to the California Department of Education (CDE) within 30 days of receipt of the invoice.

Number 11 in the Terms and Conditions of the Agreement also explains that the state agency reserves the right to discontinue, immediately, further shipments of USDA commodities to any recipient agency which fails to comply with the general intents and purposes set forth in the Agreement or any instruction issued pursuant to the Agreement.

The California State Administrative Manual (SAM), Section 8776.6 states that the CDE will send a sequence of three collection letters at 30 day intervals. The CDE Accounting Office mails a Statement of Account Letter when the invoice is 30, 60, and 90 days delinquent. Agencies with invoices unpaid with 120 day delinquency will receive a final demand letter from the CDE advising them to pay the invoice within the 15 day deadline cited in the letter, or the invoice will be collected through the Principal Apportionment Offset process. Agencies whose accounts are not subject to this offset will have their commodity orders put on hold until the delinquent invoice is paid.

If you have any questions regarding this MB, please contact Jeremy Pagan, Manager, Food Distribution Program, by phone at 916-324-7132 or by e-mail at

Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Monday, August 1, 2016
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