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Value of USDA Donated Foods for Audits


Nutrition Services Division Management Bulletin
Purpose: Policy

To: Food Distribution Program Recipient Agencies, Commodity Supplemental Food Program Agencies

Number: USDA-FDP-01-2010

Attention: Food Services Director, School Business Official, Program Director

Date: April 2010

Subject: Value of United States Department of Agriculture (USDA) Donated Foods for Audits

Reference: USDA Policy Memo FD-104, Sections 200 and 205 of Office of Management and Budget Circular A-133, Title 7, Code of Federal Regulations Parts 250 and 3052

This Management Bulletin (MB) explains the options available to recipient agencies for assigning value to USDA donated foods for audit purposes and to determine whether an audit must be conducted for a given school or fiscal year.

Audit requirements for local government agencies and nonprofit organizations that receive federal awards or grants are found in Office of Management and Budget (OMB) Circular A-133, and are codified in 7 CFR 3052. In accordance with Section 200 of OMB Circular A-133 (7 CFR 3052.200), State or local government agencies and nonprofit organization agencies that spend $500,000 or more in federal grants in a given school or fiscal year must obtain an audit for that year. The USDA Food and Nutrition Service (FNS) programs (such as National School Lunch Program [NSLP], Summer Food Service Program [SFSP], and the Commodity Supplemental Food Program [CSFP]) qualify as major programs that auditors must test for program compliance.

To determine if a recipient agency spent $500,000 in federal grants in a given school or fiscal year the agency must consider the value of USDA donated foods as part of such grants. This is accomplished by the following steps:

Step 1: Determining the quantity of each USDA donated food spent:
Step 2: Assigning value to the quantity of each USDA donated food spent:

In accordance with Section 205(g) of OMB Circular A-133 (7 CFR 3052.205(g)), USDA donated foods must be valued at either the fair market value at the time of receipt or by using one of the following USDA donated food valuation methods included in 7 CFR 250.58(e) for auditing purposes:

Each agency must select a method for valuing donated foods. Once an agency selects a method for, assigning value to donated foods, it must be used consistently in all audit activities for the entire school or fiscal year. Agencies must maintain a record of the selected option used to value donated foods for audit purposes.              

The guidance provided in this MB applies only to the value of donated foods for audit purposes and not to the value that must be used for other purposes.

This MB clarifies the new USDA policy, “Value of USDA Donated Foods for Audits” dated February 18, 2010, located at the following USDA Web page: http://www.fns.usda.gov/fdd/Policy/allfd_policies.htm.

If you have any questions regarding this MB, please contact Amy Bell, Child Nutrition Consultant, Commodity Distribution Unit, at 916-322-5051, toll-free at 800-952-5609, or by e-mail at abell@cde.ca.gov.

Questions:   Nutrition Services Division | 800-952-5609
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