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Interest Earned on the Cafeteria Account/Fund

Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information

To: School Nutrition Program Sponsors

Number: USDA-SNP-16-2009

Attention: Food Service Director, Business Official

Date: July 2009

Subject: School Nutrition Program Interest Earned on the Cafeteria Account/Fund

Reference: Title 7, Code of Federal Regulations, Part 210.2

This Management Bulletin provides clarification on interest earned in non-profit cafeteria funds. On December 24, 2008, the California Department of Education (CDE) issued a letter informing local educational agencies (LEA) that interest received on federal funds must be remitted to the CDE.

Please be clear, the information in that letter does not apply to non-profit school food service funds. Therefore, the interest earned on those funds must not be returned to the CDE.

The cafeteria fund is governed by federal and State regulations that require LEAs to use these funds solely for the operation and/or improvement of the school food service. The United States Department of Agriculture (USDA) confirmed that interest earned on cafeteria funds is allowable under Title 7, Code of Federal Regulations (CFR), Section 210.2, where the definition of “revenue” includes earnings on investments and interest earned from cafeteria funds.

Also, 7 CFR, Section 210.14(a) states that school food service revenues are to be used only for the operation or improvement of such food service. Interest earned on cafeteria fund accounts is considered allowable revenue and must accrue to the nonprofit food service account.

Additional information regarding interest earned from the USDA may be found in Section 210.14(a) Resource Management at the USDA National School Lunch Program Regulations Web page at

If you have any questions, please contact your School Nutrition Programs Specialist by phone at 916-323-7186 or 800-952-5609.

Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Thursday, August 7, 2014

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