Non-Use of Cafeteria Funds Certification

This management bulletin provides guidance and clarification on when to complete the Certification Not to Use Cafeteria Funds to Pay the Contracted Food Service Management Company (FSMC) form.

Please note that this certification only applies to program operators using the services of an FSMC.

Program operators participating in the National School Lunch (including Afterschool Meal Supplements and Seamless Summer), School Breakfast, and Special Milk programs (collectively referred to as School Nutrition Programs [SNP]) must establish a nonprofit school food service account (cafeteria fund) per Title 7, Code of Federal Regulations (7 CFR), parts 210, 215, and 220, and California Education Code sections 38090 through 38095. All federal, state, and local revenues, payments, and program reimbursements must be deposited into the cafeteria fund and are to be used solely for the operation and improvement of this service. In addition, program operators must comply with state and federal limitations on the use of cafeteria funds.

Unapproved Food Service Management Company Contracts

Program operators must use a competitive bidding process if they contract, or intend to contract, with an FSMC to provide services for one or more SNPs. Where applicable, all bid documents must be submitted to the California Department of Education (CDE) for approval prior to issuance (7 CFR, sections 210.16[a][10], 210.19[a][5], 220.7[d][ix],  and 220.16[c][1]). When prior approval is not obtained from the CDE, the program operator may not use cafeteria funds to pay the FSMC. All services provided by the FSMC, during the period of time the FSMC contract has not been approved by the CDE, must be paid from allowable nonfederal funds and documentation must be available that demonstrates no cafeteria funds were used for that purpose. In addition, the certification must be completed by the program operator, since the form certifies that the program operator understands and acknowledges that:

• They are using the services of an FSMC but did not obtain preapproval of the solicitation package or contract from the CDE.
  
  
• They will not use cafeteria funds to pay for any costs or services billed by the contracted FSMC.
  
  
• They will expend program revenues only for other allowable food service related costs.
  
  
• The costs of these services must be tracked separately and documentation must be made available demonstrating that the cafeteria fund was not used to pay these costs.
  
  
• Net cash resources will be limited per 7 CFR, sections 210.14(b) and 220.7(e)(1)(iv).
  
  
• They will notify the CDE of any changes to the FSMC contract or services provided.

The certification must be completed annually or until the program operator becomes compliant with the preapproval requirements. Note that should the program operator choose to become compliant, it cannot use cafeteria funds to reimburse or pay for the amount of time the contract was not approved.

Late Submissions Section

The CDE annually sets a deadline for receipt of all FSMC solicitation and renewal packages in accordance with 7 CFR, sections 210.16[a][10], 210.19[a][5], 220.7[d][ix],  and 220.16[c][1]). This deadline is issued in order to allow CDE staff adequate time to review, make any necessary changes, and preapprove the packages and resulting contracts before the start of the school year. Any solicitations or renewal packages received after this deadline incur the risk of not being approved by the start of the school year. If the solicitation and resulting contract or the renewal document is not approved before the beginning of the school year, the program operator shall not use cafeteria funds to pay for any services provided by the FSMC during the time the contract or renewal document is not approved. Once approval is granted, the program operator cannot use cafeteria funds to reimburse or pay for the amount of time the contract was not approved.

In the event of a late submission, the late solicitation section of the certification must be completed by the program operator acknowledging that:

• The solicitation/contract/extension document(s) were submitted after the CDE deadline and may not be approved prior to the start of the school year.
  
  
• The program operator may not use cafeteria funds to pay its FSMC until the contract/extension is approved.
  
  
• The program operator cannot use cafeteria funds to reimburse the allowable nonfederal funding source used to pay the FSMC once the contract is approved.

Resources

The certification is located in the Child Nutrition Information and Payment System, Download Forms section, Form ID PRU-04 (July 2018). Once the form is completed, it must be e-mailed to SFSContracts@cde.ca.gov or faxed to 916-322-3749. A copy must also be retained in the program operator’s files for inspection during an administrative review.

Contact Information

If you have any questions regarding this subject, you may contact the Procurement Resources Unit (PRU) by email at SFSContracts@cde.ca.gov to be directed to a PRU Specialist [Note: The preceding contact information is no longer valid. Please contact the School Food Service Contracts Unit (SFSCU) by email at SFSContracts@cde.ca.gov to be directed to a SFSCU Specialist.]