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School Cafeteria Funds Frequently Asked Questions

Nutrition Services Division Management Bulletin

Purpose: Policy, Beneficial Information

To: School Nutrition Program Sponsors

Attention: Food Service Director

Number: NSD-SNP-05-2009

Date: June 2009

Reference: 2008–09 and 2009–10 State Budget Acts; California Department of Education Correspondence Regarding the State Budget Acts; Title 7, Code of Federal Regulations Parts 210 and 214; Education Code Section 38100 et seq; Management Bulletin NSD-SNP-07-2008 (July 2008)

Subject: 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

This Management Bulletin (MB) provides information regarding the 2008–09 and 2009–10 State Budget Acts and how specific provisions within these Acts affect cafeteria funds/accounts, and responds to numerous requests from local educational agencies (LEA) for clarification on the allowable use and transferability of a school district’s or agency’s cafeteria funds.

On February 25, 2009, the State Superintendent of Public Instruction distributed a letter to all county and district superintendents located on the California Department of Education’s (CDE) Web page at, which outlined the educational components of the 2008–09 and 2009–10 State Budget. On April 17, 2009, the CDE’s School Fiscal Services Division distributed another letter located on CDE’s finance Web page at, which further clarified how the Budget Act reductions and funding flexibility affected specific programs.

The following frequently asked questions (FAQs), which can also be found on CDE’s finance Web page at, provide even further clarification regarding non-profit school food service account issues:

Are local educational agencies (LEAs) permitted to use cafeteria funds “for any educational purpose” under Section 15 of SBX3 4?

No. There are two types of flexibility in SBX3 4: flexibility with current appropriations (Section 15) and flexibility with June 30, 2008, restricted account balances (Section 42). Section 15 exempted the transfer of child nutrition (cafeteria) funds from this flexibility provision.

Were school food service cafeteria funds affected by the “across the board” reductions in the state budget?

No. Child nutrition funds are not affected by the reduction provision.

Does SBX3 4 Section 42, which allows LEAs to use June 30, 2008, restricted account balances for any purpose in 2008–09 and 2009–10, apply to child nutrition funding?

While the intent of SBX3 4 was to allow LEAs to access surplus fund balances for other district purposes, districts participating in federal school nutrition programs have minimal flexibility when utilizing cafeteria funds. SBX3 4 did not override the requirements of federal regulations that govern the use of cafeteria funds. LEAs participating in the National School Lunch, School Breakfast, and Special Milk Programs must establish a nonprofit school food service (cafeteria) fund/account. 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 or improvement of this service.

Where can I find more information about the use of school cafeteria funds?

The Limitations on Transfer of Funds Management Bulletin provides information about how federal and state regulations govern cafeteria funds and was published in July 2008. This Bulletin is available on the CDE Limitations on the Transfer of Funds Web page at


If you have any further questions about the transfer of cafeteria funds, please contact your local Child Nutrition Consultant at 800-952-5609; or the School Nutrition Programs Unit at

Note: Please refer to the CDE’s Web page regarding Action on the 2008 and 2009 Budget Acts, located at, which provides a detailed summary of CDE’s action regarding the 2008-09 state education budget, including FAQs on implementation.

Questions:   School Nutrition Programs Unit | 800-952-5609
Last Reviewed: Friday, January 15, 2016

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