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Cafeteria Fund Guidance

Provides Local Educational Authorities (LEA) with information and instructions pertaining to federal and State statutes and regulations that govern school cafeteria funds.

Federal and State Regulations

The Title 7, Code of Federal Regulations (7 CFR) governs nonprofit school food service account (cafeteria fund). School food authorities participating in the National School Lunch (NSLP), School Breakfast (SBP), and Special Milk (SMP) programs must establish a cafeteria fund [7 CFR 210.9(b)(1)]. All federal, State, and local revenues, payments, and program reimbursement must be deposited into the cafeteria fund and are to be used solely for the operation and improvement of this service [7 CFR 210.14 [http://www.ecfr.gov/cgi-bin/text-idx?node=pt7.4.220&rgn=div5#se7.4.220_114] External link opens in new window or tab.]. In addition, school nutrition program sponsors must comply with State and federal limitations on the use of cafeteria funds [7 CFR 210.9(b)(1)].

Public school districts and county offices of education that participate only in the State Meal Program or that do not participate in any reimbursable meal program still must observe all State laws (e.g., California Education Code and California Public Contract Code) relating to the operation of a food service program and the use of school food service program revenues. Food services include the preparation and service of regular and incidental meals, lunches, milk, and/or snacks in connection with school (or after school) activities, and food delivery.

Expenditures from the cafeteria fund/account are governed by both federal and State laws, specifically:

  • 7 CFR, parts 210 [http://www.ecfr.gov/cgi-bin/text-idx?node=pt7.4.210&rgn=div5] External link opens in new window or tab. and 220 [http://www.ecfr.gov/cgi-bin/text-idx?node=pt7.4.220&rgn=div5] External link opens in new window or tab. , (Effective October 1, 2015, 7 CFR, parts 3015 [http://www.gpo.gov/fdsys/pkg/CFR-2014-title7-vol15/xml/CFR-2014-title7-vol15-part3015.xml] External link opens in new window or tab. , 3016 [http://www.gpo.gov/fdsys/pkg/CFR-2014-title7-vol15/xml/CFR-2014-title7-vol15-part3016.xml] External link opens in new window or tab. , and 3019 [http://www.gpo.gov/fdsys/pkg/CFR-2014-title7-vol15/xml/CFR-2014-title7-vol15-part3019.xml] External link opens in new window or tab. were incorporated into Title 2, Code of Federal Regulations (2 CFR), Part 200 [http://www.ecfr.gov/cgi-bin/text-idx?node=pt2.1.200&rgn=div5] External link opens in new window or tab.)

  • 2 CFR, Part 200 [http://www.ecfr.gov/cgi-bin/text-idx?node=pt2.1.200&rgn=div5] External link opens in new window or tab. (Effective October 1, 2015, 2 CFR, parts 225 [http://www.gpo.gov/fdsys/granule/CFR-2012-title2-vol1/CFR-2012-title2-vol1-part225/content-detail.html] External link opens in new window or tab. and 230 [http://www.gpo.gov/fdsys/granule/CFR-2012-title2-vol1/CFR-2012-title2-vol1-part230/content-detail.html] External link opens in new window or tab. was superceded by 2 CFR, Part 200 [http://www.ecfr.gov/cgi-bin/text-idx?node=pt2.1.200&rgn=div5] External link opens in new window or tab.)

  • All CFRs can be accessed from the U.S. Government Printing Office CFR [http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR] External link opens in new window or tab. Web page

  • California Education Code (EC) and the Public Contract Code (PCC) can be accessed from the California Legislation Information Code Search [http://leginfo.legislature.ca.gov/faces/codes.xhtml] External link opens in new window or tab. Web page.

  • The California School Accounting Manual (CSAM) can be downloaded from the CDE’s Definitions, Instructions, and Procedures [http://www.cde.ca.gov/fg/ac/sa/] Web page.

  • The California Department of Education, Nutrition Services Division (NSD) strongly recommends that NSLP and SBP sponsors review the USDA indirect costs guidance manual with their business officers, accounting officials, and legal representatives.

  • NSD School Nutrition Programs (SNP) Administrative Review [http://www.cde.ca.gov/ls/nu/ar/arsnp.asp] Web page provides information, regulations, procedures, and updates on the SNP administrative review process.

  • NSD SNP Procurement [http://www.cde.ca.gov/ls/nu/sn/fsmcproc.asp] Web page provides Federal procurement regulations to school food authorities (SFA) for contracting with food service management companies, vendors, or competitively procuring food.

  • The USDA Indirect Cost Guidance Policy Memo SP 41-2011 [http://www.fns.usda.gov/indirect-cost-guidance] External link opens in new window or tab. (PDF) provides guidance on program rules pertaining to indirect costs.

SNP Presentations

Cafeteria Fund 2013–14 Webinar Series

This Cafeteria Fund Webinar series started in December 2013 and continued through February 2014 and provided training and resources to local educational agency (LEA) staff to help them properly manage and expend cafeteria funds as required by federal and state law, as well as regulatory and policy guidance.

  • Cafeteria Funds Webinar Part 1 – The Basics [https://www.youtube.com/watch?v=VdiTgq1wNiA] External link opens in new window or tab.
    This video provides Cafeteria Fund Basics, which include general definitions, resources, and easy to answer questions.

  • Cafeteria Funds Webinar Part 2 – Practical Applications [https://www.youtube.com/watch?v=1Wx457zzFSs] External link opens in new window or tab.
    This video builds on Part 1 by instructing the viewer on how to analyze Cafeteria Fund related questions.

  • Cafeteria Funds Webinar Part 4 – Paid Lunch Equity and Revenue from Non-program Foods [https://www.youtube.com/watch?v=WlpCmrk6ouI] External link opens in new window or tab.
    This video provides a review of paid lunch equity (PLE) and nonprogram foods. The viewer will learn policy guidelines governing these two requirements from the Healthy, Hunger Free Kids Act of 2010 and go through step-by-step instructions on how to use both the USDA PLE and Nonprogram Food Tool.

  • Cafeteria Funds Webinar Part 5 – Allowable Renovation Costs [https://www.youtube.com/watch?v=U7wiRnkowow] External link opens in new window or tab.
    This video provides an overview of the federal and state regulations, laws and policy guidelines to explain and define allowable renovation costs. The viewer is given a series of questions and answers to many different renovation scenarios and learns the two criteria that distinguish between construction and non-construction type renovations.

  • Cafeteria Funds Webinar Part 6 – Time Accounting Requirements [https://www.youtube.com/watch?v=sifxOX3UXv4] External link opens in new window or tab.
    This video provides a review of the time accounting requirements. The viewer will first be given a series of questions to test their knowledge, then will learn the policy guidelines governing the time accounting requirements. The video will then present the questions again with the answers, instructing the viewer on the different types of time accounting in detail.

Frequently Asked Questions

Questions and answers to aid LEAs with understanding the complex requirements surrounding Cafeteria Funds. If you are unable to find the answer to your question below, please contact the Resource Management Unit at snpcafefundquestions@cde.ca.gov for additional guidance.

U.S. Department of Agriculture Capital Expenditure Approved List

Per USDA Policy Memorandum SP 31-2014 [http://www.fns.usda.gov/state-agency-prior-approval-process-school-food-authority-equipment-purchases] External link opens in new window or tab. , any equipment appearing on the Capital Expenditure Approved List will possess state agency prior approval, and, therefore, the SFA may purchase those equipment items following proper federal, state, or local procurement procedures, as applicable, without submitting a request to the state agency for approval. The effective date of the USDA Capital Expenditure Approved List is July 21, 2014. This list is available as a Web document at USDA Capital Expenditure Approved List (XLS). Note: this pre-approved list only applies to School Nutrition Programs. The purchase of equipment using Child and Adult Care Food Program (CACFP) or Summer Food Service Program (SFSP) funding requires prior state agency approval from their CACFP or SFSP Program Specialist.

Management Bulletins

2016

Bulletin Number

Bulletin Subject

Release Date

SNP-08-2016 Paid Lunch Equity Requirement and Calculation Tool–Updated Guidance for School Year 2016–17 April 2016

2015

Bulletin Number

Bulletin Subject

Release Date

SNP-08-2015 Farm to School and School Garden Expenses July 2015
SNP-22-2015 Paid Lunch Equity: Updated Guidance for School Years 2015–16 and 2016–17 June 2015

SNP-09-2015

Revenue Sharing in School Nutrition Programs

January 2015

SNP-06-2015 Clarification for the Use of Alternate Meals in the National School Lunch and School Breakfast Programs, Bad Debt Policies, and the Handling of Unpaid Meal Charges May 2015

 

2014

Bulletin Number

Bulletin Subject

Release Date

SNP-38-2014 U.S. Department of Agriculture Capital Expenditure List and the Prior Approval Process for School Food Authority Equipment Purchases December 2014
SNP-20-2014 Paid Lunch Equity Requirement and Calculation Tool—Updated Guidance for School Year 2014–15 October 2014
SNP-12-2014 Revenue from the Sale of Nonprogram Foods June 2014
SNP-06-2014 Documenting Employee Time and Effort in Federal School Nutrition Programs December 2014

2013

Bulletin Number

Bulletin Subject

Release Date

USDA-SNP-18-2013 Paid Lunch Equity Requirement—Updated Guidance for School Year 2013–14 October 2013

NSD-SNP-07-2013

Cafeteria Funds—Allowable Uses

May 2013

2012

Bulletin Number

Bulletin Subject

Release Date

USDA-SNP-16-2012

Paid Lunch Equity RequirementUpdated Guidance

October 2012

USDA-SNP-36-2012

Revenue from Nonprogram Foods—Updated Guidance

September 2012

NSD-SNP-05-2012

Cafeteria Funds/AccountsReminders and Resources

May 2012

2011

Bulletin Number

Bulletin Subject

Release Date

USDA-SNP-22-2011

Indirect Cost Guidance Manual

September 2011

2010

Bulletin Number

Bulletin Subject

Release Date

NSD-SNP-15-2010

2010-11 Approved Indirect Cost Rates for Food Service Programs

July 2010

2009

Bulletin Number

Bulletin Subject

Release Date

NSD-SNP-01-2009

School Food Authorities’ Responsibilities to Provide Meal Services to Students and Clarification Regarding the Use of Parent Groups, Student Groups, and Other Community Organizations to Provide Meal Service

December 2009

USDA-SNP-16-2009

School Nutrition Program Interest Earned on the Cafeteria Account/Fund

July 2009

NSD-SNP-05-2009

Frequently Asked Questions on the Limitations on the Use and Transfer of School Cafeteria Funds/Accounts Related to the 2008-09 and 2009-10 State Budget Acts

June 2009

USDA-SNP-02-2009

Use of Vending Machines in School Meal Programs

March 2009

Contact Information

If you have questions regarding cafeteria fund policy or regulations, please contact the School Nutrition Programs Unit at 800-952-5609 or you can submit your questions to SNPCafeFundQuestions@cde.ca.gov.

If you have questions about the CSAM or how to account for particular charges to the cafeteria fund, please contact the School Fiscal Services Division, Financial Accountability and Information Services Unit by phone at 916-322-1770 or by e-mail at sacsinfo@cde.ca.gov.

Related Content

  • Fiscal Issues Relating to Budget Reductions and Flexibility Provisions (DOC) [http://www.cde.ca.gov/fg/ac/co/documents/sbx34budgetflex.doc] (July 2009) Letter to county and district chief business officials and charter school administrators regarding fiscal issues relating to budget reductions and flexibility provisions resulting from trailer bill, Senate Bill 4 of the 2009–10 Third Extraordinary Session. Provides State Budget information through 2012–13, and broad guidance governing cafeteria fund uses.

  • Limitations on the Transfer of Funds [http://www.cde.ca.gov/ls/nu/sn/mbnsdsnp072008.asp] (July 2008) Management Bulletin NSD-SNP-07-2008. Includes comprehensive federal and state cafeteria fund regulations; also includes guidance on loans and penalties.

  • School Cafeteria Funds/Account Regulations; Clarification of AB 1754 [http://www.cde.ca.gov/ls/nu/sn/caffundguide.asp] (November 2004) Joint Nutrition Services Division and School Fiscal Services Division (SFSD) Letter to County/District Superintendents, Business Officials, and School Food Service Directors. Provides districts with information and instructions pertaining to federal and State statutes and regulations that govern school cafeteria accounts, and clarifies section 39(a) of Assembly Bill (AB) 1754.

  • Cafeteria Fund Loan Guidance from the U.S. Department of Agriculture (DOC) [http://www.cde.ca.gov/ls/nu/sn/documents/caffundguideusda.doc] (posted to CDE Web June 3, 2004, as a link to above letter, and later added as link to MB NSD SNP-07-2008). Provides specific instructions as to when cafeteria fund loans can be used and how they must be repaid (with interest), and explains how the agreement for a loan must precede an actual fund transfer and be accompanied by documentation, such as a board policy.

  • Use of Cafeteria Funds/Accounts [http://www.cde.ca.gov/ls/nu/sn/mb03125.asp] (December 2003) Management Bulletin 03-125: Assembly Bill (AB) 1754. Provides additional and specific guidance that clarifies federal laws that govern cafeteria funds, which conflict with AB 1754.

  • Use of Cafeteria Funds Update [http://www.cde.ca.gov/ls/nu/sn/mb00109.asp] (March 2001) Management Bulletin 00-109. Provides specific cafeteria fund information and includes links to OMB Circulars and to 7 CFR.

  • 2003–04 Budget: Flexibility Provisions [http://www.cde.ca.gov/fg/ac/co/budgetflex.asp] (November 12, 2003) SFSD letter to County/District Superintendents, Chief Business Officials, and Charter School Administrators. Explains the flexibility in AB 1754, and advises LEAs participating in school meal programs to exercise caution, “…so as to ensure program compliance and avoid a federal audit exception.”

  • Indirect Cost Rates (ICR) [http://www.cde.ca.gov/fg/ac/ic/index.asp]. The SFSD provides extensive annual guidance for LEAs, including the list of indirect cost rates for each LEA, explanation of how indirect cost rates are calculated and applied, and the annual state-wide maximum indirect cost rate for the Child Nutrition Programs.

Questions:   School Nutrition Programs Unit | SNPCafeFundQuestions@cde.ca.gov | 800-952-5609
Last Reviewed: Wednesday, April 13, 2016
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