Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information
To: School Nutrition Program Sponsors
Attention: Food Service Director, School Business Official, County Business Official
Date: December 2009
Subject: 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
|References: Title 7, Code of Federal Regulations, sections 210.2, 210.14, and 210.19 and Parts 245, 3015, 3016, and 3019; California Education Code sections 38080-38103, 38134, 45103.1, 45103.5, 45122-45126, 48931, 49530, 49531, 49550, 49552, 49553, 49554, 49557, California Health and Safety Code, Part 7; California Retail Food Code; Public Contract Code sections 20110-20118.4; California School Accounting Manual; and Office of Management and Budget Circulars A-87|
With the current budget crisis in California, many school districts and County Offices of Education (COEs) are searching for alternatives to decrease budget shortfalls and have asked the California Department of Education (CDE) for guidance as to what their responsibilities are to provide meals to students and in what ways can they change how the school meal programs are operated.
This Management Bulletin (MB):
- Clarifies the State and federal laws that require meals to be served to students
- Clarifies the laws relating to the use of parent groups, student groups, and other community organizations in providing services related to school meal programs
- Addresses questions regarding the use of such groups to assist with any aspect of the school meal program
Most of these State and federal laws apply to school districts and COEs regardless of their participation in the National School Lunch Program (NSLP) or other school meal programs that provide reimbursement for meals served to students.
The following Frequently Asked Questions deal with general school meal program requirements for all school districts and COEs in California, laws regarding cafeteria account funds, and necessary procedures for procuring the services of a food service management company or meal vendor.
- If a district does not receive any federal or State child nutrition funds, are there any laws that govern how lunches are provided to students in the district?
- Yes. Several California State laws govern the need for and provision of school meals, regardless of a district’s participation in a reimbursable meal program. The California Legislature has recognized the demonstrated relationship between proper nutrition of all school children and its impact upon their ability to learn each day, and created numerous statutes that apply to all school districts, even if the district does not receive any State or federal nutrition funds.
The relevant State laws include California Education Code (EC) Section 49550, which requires that every school district and COE with students in kindergarten through grade 12 (K-12) serve a nutritionally adequate meal to every free or reduced-price eligible student during the school day. Other laws include EC Section 49553, which defines a nutritionally adequate meal, and EC Section 49557, which describes how a school must determine eligibility of students for a free or reduced-price meal.
- Is a school district responsible for serving meals to low-income students?
- Yes. Each public school district and county superintendent of schools maintaining grades K-12 is required to provide one nutritionally adequate meal to free or reduced-price eligible children during each school day (EC sections 49550 and 49553), even if the district or COE does not participate in a State or federal meal program. Therefore, every district must formulate a plan to determine eligibility, make applications for free and reduced-price meals available at all times during the regular school day, and serve meals without discrimination or separation (EC Section 49557). Alternatively, the district may offer meals at no cost to all students (but still claim reimbursement by their eligibility category).
A district or COE should use meal eligibility applications to identify low-income students for a meal program (EC Section 49557). Prototype forms are available at the following California Department of Education (CDE) School Nutrition Program Eligibility Materials Web page at http://www.cde.ca.gov/ls/nu/sn/eligmaterials.asp.
Districts that do not use a CDE prototype application(s) must use an application that complies with Title 7, Code of Federal Regulations (7 CFR), Section 245.6, which is outlined in Part 2 of the United States Department of Agriculture Eligibility Manual for School Meals and EC Section 49557(a) on the CDE Web site.
A nutritionally adequate meal is defined as a breakfast or lunch that qualifies for reimbursement under the federal child nutrition program regulations [EC Section 49553(a)]. Needy children are defined as those who meet federal eligibility criteria for free and reduced-price meals (EC Section 49552).
The school district must also follow all State and federal confidentiality rules regarding school meal eligibility information, including eligibility records, applications, and status. California statute governing confidentiality is more stringent than federal law. The disclosure of an individual student’s meal eligibility information is restricted for use in the school meal program. However, the law allows limited flexibility for a district to provide individual eligibility information to school board approved staff or positions for testing purposes, for the process of disaggregating academic achievement data, and for No Child Left Behind (NCLB) coordinators to provide supplemental educational services and school choice to students enrolled in Program Improvement schools. In all cases, a Board policy explaining these processes by person or position must exist prior to any disclosure, and all data must be destroyed after its intended use (EC Section 49558).
- If a district does not have any low-income students, are there any laws requiring that lunches be provided to students in the district?
- Yes. Regardless of whether a district determines it has no low-income students on a given day, the student population may change on a day-to-day basis, as may the circumstances of the families within the district. EC Section 49550 requires that each school district or county superintendent of schools maintaining any kindergarten or any of grades 1 to 12, inclusive, shall provide each free or reduced-price eligible pupil one nutritionally adequate meal during each school day. Therefore, a district must make eligibility applications available to all students each school day, have a process to determine eligibility for school meals on an ongoing basis, and have a plan to serve nutritionally adequate meals daily (EC Section 49557).
- Can parent groups, student groups, or other community organizations act as a school food authority for the National School Lunch Program (NSLP)?
- No. A School Food Authority (SFA) is defined in federal regulations as the governing body that is responsible for the administration of one or more schools and has the legal authority to operate the NSLP or be otherwise approved to operate the Program. Therefore, a parent group, student group, or other community organization would not qualify to act as an SFA and become a sponsor of the NSLP (7 CFR, Section 210.2).
- Can parent groups, student groups, and other community organizations act as a Food Service Management Company?
- Yes. A Food Service Management Company (FSMC) is defined in federal regulations as a commercial enterprise or a nonprofit organization that an SFA may contract with to manage any aspect of the school food service. As long as a parent group, student group, or other community organization meets all other federal, State, and local requirements for the services it is hired to provide, including food safety, it may act as an FSMC (7 CFR, Section 210.2).
- Are there any laws or regulations relating to the procurement of FSMC services?
- Yes. Several State and federal laws and regulations govern the procurement of FSMC services. Any procurement using funds from the school cafeteria account must be accomplished using a competitive bid process, whether formal or informal. Federal regulations set an annual bid threshold at $100,000. For public schools and COEs, State law sets an annual bid threshold ($76,700 for 2009, see A10 for further clarification). Any procurement at or above the threshold must follow a formal bid process; any procurement below that amount may follow an informal bid process in lieu of a formal bid process.
There are a variety of other federal regulations regarding FSMC contracts, including those that prohibit “cost-plus-a-percentage-of-cost” contracts, require the return of rebates, discounts, and applicable credits to the SFA, and limit the term of the contract to one year with options to renew the contract for four one-year periods.
The California EC places additional restrictions on FSMC contracts procured by public school districts and COEs. EC mandates that a contract for food service management or consulting services shall not cause or result in the elimination of any food service classified personnel or positions, nor in any adverse effect upon any such personnel with respect to wages, benefits, or other terms and conditions of employment. Additionally, food service management personnel may not supervise food service classified personnel who are employees of the district or COE.
Please contact the CDE for more information about federal and State regulations regarding FSMC contracts.
- Can parent groups, student groups, and other community organizations add a surcharge to the actual school meal program prices as an opportunity for fundraising?
- No. Cafeteria fund revenues are restricted, and may only be used for the maintenance and improvement of school food services. Also, expenditures from the cafeteria fund are restricted by federal and State law.
Federal regulations that govern cafeteria funds include, but are not limited to, 7 CFR sections 210.2, 210.14, and 210.19.
- Section 210.2 - Definitions
- “Nonprofit school food service means all food service operations conducted by the school food authority principally for the benefit of schoolchildren, all of the revenue from which is used solely for the operation or improvement of such food services.”
- “Revenue, when applied to nonprofit school food service, means all [emphasis added] monies received by or accruing to the nonprofit school food service in accordance with the State agency's established accounting system including, but not limited to, children's payments, earnings on investments, other local revenues, State revenues, and Federal cash reimbursements.”
- Section 210.14 Resource Management
(a) "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under Sec. 210.19(a) of this part. . .”
- Section 210.19(a)(2)
(2) Assurance of compliance for finances. Each State agency shall ensure that school food authorities comply with the requirements to account for all revenues and expenditures of their nonprofit school food service. School food authorities shall meet the requirements for the allowability of nonprofit school food service expenditures in accordance with this part and, as applicable, 7 CFR part 3015. [now 3016/3019]
In the event that net cash resources exceed 3 months' average expenditures for the school food authority's nonprofit school food service or such other amount as may be approved in accordance with this paragraph, the State agency may require the school food authority to reduce the price children are charged for lunches, improve food quality or take other action designed to improve the nonprofit school food service. In the absence of any such action, the State agency shall make adjustments in the rate of reimbursement under the Program.
- EC Section 38080 defines the term “cafeteria” to be used in these sections of EC as synonymous with the term “food service.”
- EC Section 38090 states that money received from the sale of food or for any services performed by the cafeterias may be paid into the county treasury to the credit of the “cafeteria fund” of the particular school district.
- EC Section 38093 states that all receipts of the cafeteria, derived from the sale of food, shall be deposited in the cafeteria account and shall be expended only for the maintenance of the cafeterias.
- EC Section 38101 defines allowable cafeteria fund expenditures as those charges defined in the California School Accounting Manual (CSAM).
- EC Section 38101(e) further states that, “This section does not authorize a school district to charge a food service program any charges prohibited by State or federal law or regulation.” This is also stated in the federal Office of Management and Budget Circular A-87, which can be found at http://www.whitehouse.gov/sites/default/files/omb/assets/agencyinformation_circulars_pdf/a87_2004.pdf.
- EC Section 38101(f) states, “…If the department and the Department of Finance concur that a school district has violated this section, the Superintendent shall direct that school district to transfer double the amount improperly transferred to the general fund of the school district from that fund to the cafeteria fund of the school district or cafeteria account for the subsequent fiscal year which is then to be used for the improvement of the food service program of the school district. If the district fails to make that transfer, the Superintendent shall reduce the district’s regular apportionment of the school district, determined pursuant to EC Section 42338 and increase the child nutrition allowance of the school district determined pursuant to EC Section 41350 by double the amount [emphasis added] improperly transferred to the general fund of the school district and that amount is to be used for improvement of the food service program.”
- Finally, EC Section 38101(g) states, “It is the intent of the Legislature in enacting this section that responsible school district officials be held fully accountable for the accounting and reporting of food service programs and that minor and inadvertent instances of noncompliance be resolved in a fair and equitable manner to the satisfaction of the Superintendent and the Department of Finance.”
The CSAM also restricts the revenues and expenditures for school food services. The CSAM Procedure 325, Code 3700 defines “Food Services” as “Activities concerned with providing food to students and staff in a school or LEA. The service area includes preparing and serving regular and incidental meals, lunches, or snacks in connection with school activities and food delivery.”
The specific cost items for food services are listed in this Code, which is available for downloading on the CDE Accounting Web page at http://www.cde.ca.gov/fg/ac/sa/#downloading.
- Section 210.2 - Definitions
- Can parent groups, student groups, or other community organizations vend meals to an SFA?
- These groups or organizations typically do not meet all federal, State, and local laws regarding food preparation and sales. However, if the group or organization meets all federal, State, and local laws, then the group may vend (sell) meals to an SFA subject to competitive bid requirements and other State approvals. In most circumstances a parent group, student group, or other community organization does not possess a valid permit to operate a food facility.
There are food safety laws that pertain to how food is prepared and served to all individuals. Food safety laws identify infants and young children as a high risk population. Therefore, it is imperative that food be prepared and served in a manner that protects children from acquiring a food borne illness. It is the responsibility of the school district to ensure that all meals served to children comply with the food safety rules and regulations of the California Retail Food Code (CalCode), which are available from the following the California Retail Food Safety Coalition Web page at http://www.crfsc.org/resources/documents/cat_view/15-calcode.
- Are there any laws or regulations relating to the procurement of a meal vendor?
- Yes. Any SFA may contract for prepared meals for its students, subject to competitive bid requirements. However, there are specific conditions and prohibitions for public school districts and COEs related to contracting for nutritionally adequate meals. EC Section 49554 states that before a school district or COE may contract with an outside organization for the preparation, delivery, and service of meals, the school district must meet one of the following conditions: (1) the district has had no food service employees since July 1, 1977, or (2) it has no or inadequate food preparation facilities as determined by the State Department of Education.
Once this requirement has been met, the district or COE must solicit all school districts within the same county and the county superintendent of schools to ascertain if any of them have the facilities and are willing to provide such food service. If a district agrees to provide such services, the school district must enter into a vending contract with that district.
If no other district in the same county or the COE is willing and able to provide meals, the district must certify to the CDE that it has met all the requirements of EC 49554 and provide documentation to support the certification. Private meal vendors must possess a current health permit issued by the local County Environmental Health Department, and be able to transport the meals safely.
Once the district has certified to the CDE that it has met the conditions of EC 49554, the district must adhere to and remains responsible for following all applicable State and federal rules regarding procurement of goods and services, labor, and employment as outlined in the question above regarding the procurement of FSMC contracts.
- What is the difference between a formal bid process and an informal bid process?
- Federal regulations require all SFAs to competitively bid and award any contracts involving an expenditure of more than $100,000 (the “small purchase threshold”) to the lowest responsible bidder for school food services using a formal bid process. Alternatively, any SFA expending less than $100,000 may opt to use an informal bid process in lieu of a formal bid process.
School districts and COEs are governed by California Public Contract Code Section 20111(a), which set the bid threshold for school district governing boards at $76,700 (see California Public Contract Code sections 20110-20118.4 for more details). School districts and COEs must use a formal bid process for any purchase at or above this amount; any school district or COE having an expenditure of less than $76,700 may opt to use an informal bid process in lieu of a formal bid process.
An informal bid process consists of obtaining three price quotes from qualified sources and choosing the lowest quote unless the SFA can justify otherwise. A formal bid process consists of the SFA placing an advertisement (or in the case of a public school district, two advertisements, one week apart), in a newspaper of general circulation, providing all applicants with a Request for Proposals (RFP) or Invitation for Bids (IFB), and choosing the lowest responsible bidder, unless the SFA can justify otherwise. Please contact the CDE for more information and prototype forms for completing a bid process.
If you have any questions regarding this MB, please contact Tracey Smith, School Nutrition Program Specialist, at 916-322-3934 or at firstname.lastname@example.org.