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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 cafeteria accounts. School food authorities participating in the National School Lunch (NSLP), School Breakfast (SBP), and Special Milk (SMP) Programs must establish a nonprofit school food service (cafeteria fund/account) [7 CFR 210.9(b)(1)]. All federal, State, and local revenues, payments, and program reimbursement must be deposited into the cafeteria account and are to be used solely for the operation and improvement of this service [7 CFR 210.14]. 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 External link opens in new window or tab., 220 External link opens in new window or tab., 3015 External link opens in new window or tab., 3016 External link opens in new window or tab., and 3019 External link opens in new window or tab.

2 CFR parts 225 External link opens in new window or tab. and 230 External link opens in new window or tab. (formerly Office of Management and Budgets Circulars A-87 and A-122 respectively)

NOTE: CFRs can be accessed from the U.S. Government Printing Office CFR [] External link opens in new window or tab. Web page

California Education Code (EC) sections can be accessed from the California Legislation Information Code Search [] External link opens in new window or tab. Web page.

California Public Contract Code (PCC) sections 20110–20118.4 can be accessed from the Official California Legislation Information California Law 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 [] 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.

The USDA Indirect Cost Guidance Policy Memo SP 41-2011 [] 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.

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 for additional guidance.

U.S. Department of Agriculture Capital Expenditure Approved List

Per USDA Policy Memorandum SP 31-2014, 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).

Management Bulletins


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


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



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


Bulletin Number

Bulletin Subject

Release Date

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


Cafeteria Funds—Allowable Uses

May 2013


Bulletin Number

Bulletin Subject

Release Date


Paid Lunch Equity RequirementUpdated Guidance

October 2012


Revenue from Nonprogram Foods—Updated Guidance

September 2012


Cafeteria Funds/AccountsReminders and Resources

May 2012


Bulletin Number

Bulletin Subject

Release Date


Indirect Cost Guidance Manual

September 2011


Bulletin Number

Bulletin Subject

Release Date


2010-11 Approved Indirect Cost Rates for Food Service Programs

July 2010


Bulletin Number

Bulletin Subject

Release Date


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


School Nutrition Program Interest Earned on the Cafeteria Account/Fund

July 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


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

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

Related Content

  • Fiscal Issues Relating to Budget Reductions and Flexibility Provisions (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 [] (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 [] (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) [] (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 [] (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 [] (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 [] (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) []. 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 | | 800-952-5609
Last Reviewed: Monday, July 27, 2015

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