Two-cent Differential Reimbursement for New SFAs

Nutrition Services Division Management Bulletin

Purpose: Policy, Beneficial Information

Reference: U.S. Department of Agriculture Policy Memoranda SP 30-2014: Determining Eligibility for Two-cent Differential Reimbursement

Supersedes: Management Bulletin SNP-03-2015

Subject: Determining Eligibility for Two-cent Differential Reimbursement for New School Food Authorities

This Management Bulletin (MB) provides guidance on determining eligibility for the federal two-cent differential reimbursement for new school food authorities (SFA).

The two-cent differential is a higher rate of reimbursement for lunches served under the National School Lunch Program (NSLP). SFAs eligible for the two-cent differential are defined as those that served at least 60 percent free and reduced-price (F/RP) NSLP lunches two school years prior. This MB provides information for new, qualifying SFAs on the process for requesting the additional two-cent differential reimbursement when they do not have the required two-year NSLP claiming history to qualify.

Background

Section 4 of the Richard B. Russell National School Lunch Act (NSLA) provides general cash assistance to aid schools in the purchasing of food. The NSLA provides two different Section 4 payment levels for lunches served under the NSLP:

• The base payment applies to lunches served by SFAs when less than 60 percent of the lunches were served during the second preceding school year at an F/RP rate.

• A higher payment of two additional cents per lunch is available to SFAs that served 60 percent or more of the lunches at an F/RP rate in the second preceding school year. This higher payment rate is referred to as the “two-cent differential.”

School Food Authority Eligibility

The following section defines when SFAs without a two-year NSLP claiming history may qualify for the two-cent differential.

• SFAs currently eligible for the two-cent differential that change their name or move to a new location with no change in student population are automatically eligible for the two-cent differential reimbursement rate. Contact your School Nutrition Programs (SNP) county specialist for assistance.

• New SFAs without a two-year lunch history may qualify for the two-cent differential if 60 percent or more of the lunches they served for the first three claiming periods of the current school year (SY) were to students eligible for F/RP meals. Contact your SNP county specialist for assistance and complete Form SNP-20 as identified below.

Two-cent Differential Reimbursement Rate Request and Claiming Timelines

The following section describes the required steps and timeline for the SFA to submit a request to the California Department of Education (CDE) for approval of the two-cent differential.

If an SFA does not have a two-year history of serving NSLP lunches and believes they may be eligible for the two-cent differential, they must submit to the CDE the Two Cent Differential Reimbursement Request – Alternate Eligibility (Form SNP-20) located in the Download Forms section of the Child Nutrition Information and Payment System (CNIPS). The information provided on Form SNP-20 must demonstrate that the new SFA served at least 60 percent of their lunches at an F/RP rate in the first three reimbursement claiming periods of the current SY. If SFAs submit Form SNP-20 during the fourth claiming period of the SY, the CDE may retroactively approve a two-cent differential to encompass the first three NSLP claiming periods that were used to establish the SFA’s two-cent differential eligibility.

For example, if August, September, and October are the first three claiming periods of the SY, the SFA must submit the request for the two-cent differential during the month of November (the fourth claiming period). However, if SFAs operate 10 or fewer days in August and choose to combine their August and September reimbursement claims, they must submit Form SNP-20 during the month of December, which, in this instance, is the fourth claiming period.

SFAs that submit the form after the fourth claiming period will receive the two-cent differential starting the month in which an approvable request is received.

The CDE will not review or approve two-cent differential reimbursement requests that SFAs submit before the fourth claiming period of the SY. School days during July designated by the SFA as summer school for the prior SY are not counted toward the first three claiming periods.

Email completed SNP-20 forms to your SNP County Specialist. Once the CDE approves an SFA’s Form SNP-20, the SFA’s assigned Nutrition Claims Analyst will contact the SFA’s claims preparer, as identified on the SFA’s current CNIPS application, to provide instructions for submitting reimbursement claims.

SFAs must annually qualify for the Two-cent Differential. SFAs without a two-year NSLP claiming history must annually submit Form SNP-20 through the process defined in this MB, until the SFA establishes the required two-year lunch history. Once an SFA has established a two-year NSLP claiming history, the CNIPS will automatically calculate and populate the additional reimbursement for eligible SFAs.

Contact Information

If you have any questions regarding this subject, please contact the appropriate SNP county specialist listed on the SNP Specialist Directory web page at https://www.cde.ca.gov/ls/nu/sn/snpcontacts.asp. You can also email SNPInfo@cde.ca.gov to be directed to your SNP County Specialist.

If you have any questions about meal reimbursement claims, please contact your agency’s assigned Nutrition Claims Analyst. A directory of these analysts can be found on the CDE Nutrition Services web page at http://www.cde.ca.gov/fg/aa/nt/.