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Availability of Potable Water and Allowable Costs


Nutrition Services Division Management Bulletin

 

Purpose: Policy, Beneficial Information

To: Child Nutrition Program Operators, Child Nutrition Programs

Attention: All Child Nutrition Program Operators

Number: SNP 05-2017, CACFP 02-2017

Date: February 2017

Reference: Healthy, Hunger-Free Kids Act of 2010; U.S. Department of Agriculture Policy Memorandum SP 49–2016, CACFP 18–2016: Resources for Making Potable Water Available in Schools and Child Care Facilities; USDA Policy Memo CACFP 20-2016: Water Availability in the CACFP; USDA Capital Expenditure Approved List; USDA Policy Memo SP 28-2011; USDA Policy Memo SP 41-2011; USDA Policy Memo CACFP 20-2016; California Education Code, Section 38086; Management Bulletin 00-109; California School Accounting Manual, Procedure 770

Subject: Availability of Potable Water to Children and Allowable Costs


This Management Bulletin (MB) supplements the U.S. Department of Agriculture (USDA) Policy Memorandum SP 49-2016, CACFP 18-2016: Resources for Making Potable Water Available in Schools and Child Care Facilities, by identifying resources to make potable water for children more accessible. Furthermore, this MB provides clarification on the allowable costs to the National School Lunch Program (NSLP) and the Child and Adult Care Food Program (CACFP).

On July 20, 2016, in an ongoing effort to ensure access to free, fresh drinking water, the USDA released Policy Memo SP 49-2016, CACFP 18-2016, to remind schools and child care agencies of the requirement to make available potable water for their enrolled children. In the NSLP, participating school districts must make potable water available to students during meal times where meals are served. Students must also have access to potable water when breakfast is served in the cafeteria. In the CACFP, all children participating at child care centers, day care homes, at-risk afterschool programs, and shelters must have access to potable water throughout the day.

Water Access and Quality—Resources
The following potable water information and resources are available to child nutrition program operators:
  • Senate Bill (SB) 1413 (Leno) established California Education Code (EC), Section 38086, requiring school districts to provide access to free, fresh drinking water during meal times. This SB is on the California Department of Education (CDE) Drinking Water for Students in Schools Web page at http://www.cde.ca.gov/ls/nu/he/water.asp.
  • Healthy, Hunger-Free Kids Act of 2010 established a requirement for making water available to children in the NSLP where reimbursable meals are served during the meal period. MB SNP 27-2012 clarifies this requirement. This MB is on the CDE Access to Free Drinking Water—Update Web page at http://www.cde.ca.gov/ls/nu/sn/mbusdasnp272012.asp.
  • State Superintendent of Public Instruction (SSPI) Tom Torlakson’s Team California for Healthy Kids initiative focuses on hydration and access to clean water as one of three main goals. This information is on the CDE Team California for Healthy Kids Web page at http://www.cde.ca.gov/eo/in/tchk.asp.
  • SSPI Torlakson’s most recent communication to county and district superintendents and charter school administrators encouraging all California schools to consider testing water quality and replacing water-related equipment when necessary. This letter is on the CDE Clean Water Web page at http://www.cde.ca.gov/nr/el/le/yr16ltr0617.asp.
  • The State Water Resources Control Board (SWRCB) created a grant program to help schools address water quality, specifically, in communities with the greatest need. Grants should be available by summer 2017. The CDE will apprise school districts of  future grant opportunities. This information is on the SWRCB Clean Water for Schools Program Web page at http://www.waterboards.ca.gov/water_issues/programs/grants_loans/schools.
  • Kindergarten through grade 12 schools in California can receive free testing for lead under a new initiative by the SWRCB. Sampling locations can include drinking fountains, cafeteria and food preparation areas, and reusable water bottle filling stations. Free testing extends until November 1, 2019. This information is on the SWRCB Lead Sampling of Drinking Water in California Schools Web page at http://www.waterboards.ca.gov/drinking_water/certlic/drinkingwater/leadsamplinginschools.shtml.
Allowable Costs in Accessing Potable Water

Title 2, Code of Federal Regulations (2 CFR), sections 200.404 and 200.405, and
Title 7, Code of Federal Regulations (7 CFR), sections 210.14(a) and 226.15(a)(13), regulate the nonprofit school food service account funds (School Nutrition Programs [SNP]) and nonprofit food service accounts (CACFP). According to 2 CFR, sections 200.404 and 200.405, the following factors must be used to determine the allowability of these funds: 

  • Reasonable and necessary—the cost is essential to fulfill regulatory requirements for proper and efficient administration of the program and is needed for the operation of the CNPs. Costs must not exceed that which would be incurred by a prudent person under the circumstances at the time the decision was made to incur the cost.
  • Allocable—the cost can be reasonably charged or assigned to a particular cost objective in proportion to the relative benefits to the program or other activities. Only the portion benefiting food service can be charged to the cafeteria fund and nonprofit food service account. 

Costs to ensure access of potable water for students during meals must meet the above criteria. Any equipment purchase with a unit cost of $5,000 or more will need CDE preapproval unless it is listed on the USDA Capital Expenditure Approved List which can be viewed on the CDE Cafeteria Fund Guidance Web page at http://www.cde.ca.gov/ls/nu/sn/cafefundguide.asp.

A Questions and Answers document providing additional guidance on the implementation of potable water in the NSLP, including location requirements, reasonable costs and allowable expenditures, alternate serving areas, program questions, food safety issues, and other general information is provided in the USDA Policy Memo SP 28-2011 located on the USDA School Meals Policy Web page at http://www.fns.usda.gov/school-meals/policy.

Lists of allowable and unallowable potable water costs for the NSLP and CACFP are provided at the end of this MB.

Excess Net Cash Resources

In order to be compliant with federal regulations, school food authorities (SFA) that have excess net cash resources (NCR) are strongly encouraged to use allowable potable water costs. Detailed information about the NCR is available in MB NSD-SNP-05-2012 on the CDE Cafeteria Funds/Accounts–Reminders and Resources Web page at http://www.cde.ca.gov/ls/nu/sn/mbnsdsnp052012.asp.

Contact Information

If you have any questions regarding the requirements for access to water in schools, please contact Michael Danzik, Nutrition Education Consultant, by phone at 916-445-7346 or by e-mail at mdanzik@cde.ca.gov.

If you have any questions regarding the use of nonprofit school food service account funds, please contact the Resource Management Unit by e-mail at snpcafefundquestions@cde.ca.gov.

If you have any questions regarding water requirements or the allowability of costs for the CACFP, please contact your county’s CACFP specialist. The CACFP specialist list is available in the Download Forms section of the Child Nutrition Information and Payment System, or you can contact Nancy Charpentier, CACFP Office Technician (OT), by phone at 916-327-2991 or by e-mail at ncharpentier@cde.ca.gov, or Leslie Schar, Community Nutrition Programs Administration OT, by phone at 916-324-6153 or by e-mail at lschar@cde.ca.gov.


Potable Water: Allowability of Costs for the National School Lunch Program

Below is a limited list of allowable and unallowable costs to the Cafeteria Fund related to water access in the NSLP. All charges must be necessary, reasonable, and allocable to the NSLP. If the item of cost benefits two or more activities or programs, please submit a request for CDE preapproval by e-mail at snpcafefundquestions@cde.ca.gov.

  COST ITEM ALLOWABILITY

1

Testing for lead and other contaminants in tap water and water fountains used by students and children in the food service area

Allowable only for the operation or improvement of the nonprofit school food service  

Citations: USDA Policy Memo SP 49-2016, CACFP 18-2016; 2 CFR, sections 200.404 and 200.405; 7 CFR, Section 210.14(a); EC, Section 38086; 2 CFR, Section 200.459    

2 Normal maintenance to ensure that drinking water is safe; for service system repair or upgrade, refer to item number 7 on this list

Allowable only for the operation or improvement of the nonprofit school food service. The results of this expense cannot add to the permanent value of the property or appreciably prolong its intended life

Citations: 7 CFR, Section 210.14(a); USDA Policy Memo 41-2011;
MB 00-109; EC, Section 38086;
2 CFR, Section 200.452

3 Bulk containers or water dispensers (e.g., five-gallon dispenser) and drinking cups (e.g., 8-ounce paper cups)

Allowable only for the operation or improvement of the nonprofit school food service

Citations: 7 CFR, Section 210.14(a); EC, Section 38086 

4 Purchase of potable water for consumption by those eligible to participate in the SNP

Allowable only for the operation and improvement of the nonprofit school food service

Citations: 7 CFR, Section 210.14(a); EC, Section 38086

5 Water faucets, drinking fountain, or water hydration stations

Allowable only if the equipment is located within the food service area

It is a district expense if equipment is located outside the food service area

If such equipment has a unit cost of $5,000 or more it will require CDE preapproval

Citations: 7 CFR, Section 210.14(a); 2 CFR, Section 200.313; EC, Section 38086; MB NSD-SNP-07-2013; USDA Policy Memo SNP-27-2012;  USDA Policy Memo SP-28-2011—Revised; USDA Policy Memo SP-41-2011; and USDA Policy Memo SP 49-2016, CACFP 18-2016

6 Connecting to existing service systems

Allowable only if the electrical, plumbing, etc., is being connected to the existing service system and the result of the cost does not add to the material value of the property or appreciably prolong its intended life

Citations: 2 CFR, Section 200.452; MB NSD-SNP-07-2013; California School Accounting Manual (CSAM), Procedure 770
7 Service system repair or upgrade (e.g., remediation or repair of facility plumbing, major water plumbing, piping, replacing lead pipes, etc.)

Not Allowable as the result of these costs add to the material value of the school building, related facilities, and child care facilities, or appreciably prolong their intended life                                       

Citations: 2 CFR, Section 200.452; MB NSD-SNP-07-2013; EC, sections 38100 and 38091; CSAM, Procedure 770
8 Capital improvements and other infrastructure upgrades (e.g., connecting to main water line) that add to the material value of the school building, related facilities, and child care facilities, or appreciably prolong their intended life

Not Allowable as capital improvements are prohibited unless preapproved by the USDA Food and Nutrition Service (FNS) 
   
Citations: 7 CFR, Section 210.14(a); CSAM, Procedure 770   

9

Equipment

a) Unit cost of $5,000 or more will need CDE preapproval

b) Water filtration system (e.g., reverse osmosis filter system in a school or child care facility kitchen)

Reviewed on case-by-case basis, factors to be considered:    

1) The program participants are the primary, if not exclusive, beneficiaries 

2) The program operator can demonstrate that it has sufficient funds to purchase equipment  

3) The program operator is lacking in capital improvement funding
  
4) The expenditure is necessary to carry out the program's mission 

Citations: 7 CFR, Section 210.14(a); MB SNP-38-2014 (USDA Capital Expenditure Approved List); 2 CFR, Section 200.313; EC, sections 38100 and 38091

Note:                                                  
1) Submit a request to CDE for preapproval by e-mail at snpcafefundquestions@cde.ca.gov.

2) Excess NCR may be used for allowable costs 


Potable Water: Allowability of Costs for the Child and Adult Care Food Program

Below is a limited list of allowable and unallowable costs when using CACFP federal funds to make purchases related to water access. All charges must be necessary, reasonable, and allocable to the CACFP. EC and CSAM citations apply to SFAs only. Any inquiries regarding the allowability of costs may be directed to your county’s CACFP specialist (the CACFP specialist list is available in the Download Forms section of the Child Nutrition Information and Payment System).

  COST ITEM ALLOWABILITY

1

Testing for lead and other contaminants in tap water and water fountains used by students and children

Allowable with CDE prior approval and must be properly allocated for CACFP use
                
Citations:
2 CFR, sections 200.404, 200.405, and 459; 7 CFR, Section 226.15(e)(13); EC, Section 38086; USDA Policy Memo SP 49-2016, CACFP 18-2016    

2 Normal maintenance to ensure that drinking water is safe; for service system repair or upgrade, refer to item number 7 on this list

Allowable with CDE prior approval and must be properly allocated for CACFP use. The activity will not add to the permanent value of the property or appreciably prolong its intended life and expressly permitted within the CDE guidance

Citations: 2 CFR, Section 200.452; EC, Section 38086; 7 CFR, Section 226.15(e)(13); FNS Instruction 796-2, Revision 4, Paragraph VIII I 34

3 Bulk containers or water dispensers (e.g., five-gallon dispenser) and drinking cups (e.g., 8 oz. paper cups) Allowable with CDE prior approval and must be properly allocated for CACFP use 
                                                                                          Citations:
7 CFR, Section 226.15(e)(13); EC, Section 38086; MB USDA-CACFP-13-2011
4 Purchase of potable water for consumption by CACFP participants

Allowable with CDE prior approval and must be properly allocated for CACFP use
                                                                     
Citations:
7 CFR, Section 226.15(e)(13); EC, Section 38086; MB USDA-CACFP-13-2011; USDA Policy Memo CACFP 20-2011      

5 Water faucets, drinking fountain, or water hydration stations Allowable if such equipment costs $5,000 or more per unit; CDE-specific prior written approval is required. If the cost is less than $5,000 per unit, CDE prior approval is required. The cost of the item must be properly allocated for CACFP use. SFAs must install these items within the food service area. It is a district expense if these items are located outside the food service area

Citations: 2 CFR, Section 200.313; 7 CFR, Section 226.15(e)(13); EC, Section 38086; FNS 796-2, Revision 4, Paragraph VIII I 13; FNS 796-2, Revision 4, Paragraph VIII I 16; USDA Policy Memos SNP-27-2012 and SP 49-2016, CACFP 18-2016 
6 Connecting to existing service systems Allowable with CDE-specific prior written approval only if the electrical, plumbing, etc., is connected to the existing service system and the cost does not add to the material value of the property or appreciably prolong its intended life. Moving the service system to accommodate the new equipment is not an allowable charge. The cost must be properly allocated for CACFP use

Citations: 2 CFR, Section 200.452; 7 CFR, Section 226.15(e)(13); CSAM, Procedure 770
7 Service system repair or upgrade (e.g., remediation or repair of facility plumbing, major water plumbing, piping, replacing lead pipes, etc.)

Not Allowable as these costs add to the material value of the school building, related facilities, or child care facilities, or appreciably prolong their intended life
                  
Citations: 2 CFR, Section 200.452; 7 CFR, Section 226.15(e)(13); EC, Section 38100; CSAM, Procedure 770; FNS 796-2, Revision 4, Paragraph VIII I 34; USDA Policy Memo SP 49-2016, CACFP-18-2016

8 Capital improvements and other infrastructure upgrades (e.g., connecting to main water line) which add materially to the value of the school building, related facilities, and child care facilities, or appreciably prolong their intended life Not Allowable as capital improvements are prohibited unless preapproved by USDA FNS
                                                                                        
Citations:
2 CFR, Section  200.439(b)(3); CSAM, Procedure 770; FNS 796-2, Revision 4, Paragraph VIII I 17(a)(3); USDA Policy Memo SP 49-2016, CACFP 18-2016
9

Equipment

a) Unit cost of $5,000 or more will need CDE preapproval                                                  
b) Water filtration system (e.g., reverse osmosis filter system in a school or child care facility kitchen)

Reviewed on case-by-case basis, factors to be considered:

1) The program participants are the primary, if not exclusive, beneficiaries 

2) The program operator can demonstrate that it has sufficient funds to purchase equipment   

3) The program operator is lacking in capital improvement funding

4) The expenditure is necessary to carry out the program's mission 

Note:

When allowable, CDE-specific prior written approval is required and equipment must be properly allocated for CACFP use

Citations: 2 CFR, Section 200.313;

7 CFR, Section 226.15(e)(13); FNS 796-2, Revision 4, Paragraphs

VIII I 13 and VIII I 16; MB SNP-38-2014 (USDA Capital Expenditure Approved List); and USDA Policy Memo SP 49-2016, CACFP 18-2016
Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Wednesday, March 8, 2017
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