Skip to main content
California Department of Education Logo

Value of USDA Foods for Audits

Nutrition Services Division Management Bulletin

Purpose: Policy, Beneficial Information

To: Food Distribution Program Recipient Agencies

Attention: Food Service Directors

Number: FDP-01-2017

Date: March 2017

Reference: U.S. Department of Agriculture (USDA) Policy Memorandum FD-104: Value of USDA Donated Foods for Audits (Revised); Title 2, Code of Federal Regulations, parts 200 and 400

Supersedes: Management Bulletin USDA-FDP-01-2010 Value of USDA Donated Foods for Audits

Subject: Value of U.S. Department of Agriculture Foods for Audits

This Management Bulletin (MB) explains the options available to a recipient agency (RA) when assigning value to U.S. Department of Agriculture (USDA) Foods for audit purposes, and explains when an audit must be conducted for a given fiscal year. This MB clarifies the revised USDA Policy Memo FD-104: Value of USDA Donated Foods for Audits dated December 2, 2016, that is located on the USDA Food Distribution Policy Web page at This MB supersedes MB USDA-FDP-01-2010: Value of USDA Donated Foods for Audits dated April 2010.


In accordance with the Office of Management and Budget Uniform Guidance, Title 2, Code of Federal Regulations (2 CFR), Section 200.501, agencies that spend $750,000 or more in federal awards in a given school or fiscal year must obtain an audit for that year. RAs participating in the National School Lunch Program, Summer Food Service Program, Child and Adult Care Food Program, or charitable institution that receives USDA Foods in accordance with Title 7, Code of Federal Regulations (7 CFR), Section 250.67, must consider the value of USDA Foods received in a fiscal year as dollars spent, and include that amount in their total calculated federal awards.

Audit requirements for local government agencies and nonprofit organizations that receive federal awards or grants are found in 2 CFR, Part 200, Subpart F, and Appendix XI, Compliance Supplement, and 2 CFR, Part 400.

Assigning Value to USDA Foods

In accordance with 2 CFR, Section 200.502(g), USDA Foods must be valued at either fair market value at the time of receipt (excluding nonfood items) or by using one of the following USDA Foods valuation methods included in 7 CFR, Section 250.58(e):

  • The most recently published cost-per-pound price in the USDA Foods catalog at the time of an order found in the Food and Nutrition Service electronic USDA Web-based Supply Chain Management (WBSCM) system.
  • The average of each USDA Foods price based on the state’s USDA Foods orders in WBSCM. To calculate the average, all prices for a particular USDA Foods are averaged together to get an average cost per pound for the item for the current fiscal year. The California Department of Education uses this valuation method for USDA Foods prices in the Child Nutrition Information and Payment System, which can be accessed from the Statement of Commodities Shipped Report.

Each RA must choose a method of valuing USDA Foods for audit purposes. Once an RA selects a method of assigning value to USDA Foods, it must use that method consistently in all audit activities and maintain a record of the means of valuing USDA Foods for such purpose.

The guidance provided in this MB is intended for assessing value of USDA Foods for audit purposes only and must not be used for other purposes, such as valuing USDA Foods when determining and pursuing claims for food losses.

Contact Information

If you have any questions regarding this subject, please contact Amy Bell, Child Nutrition Consultant, Food Administration Unit, by phone at 916-322-5051 or by e-mail at

Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Tuesday, September 24, 2019
Related Content
Recently Posted in Nutrition
  • August 25, 2020 Tuesday at 2 Webinar (added 18-Sep-2020)
    The CDE NSD hosted the eighth Tuesday @ 2: School Nutrition Town Hall webinar on August 25, 2020 for school food service operators, chief business officials, and community partners.
  • COVID 19: FFVP School Year 2020–21 Waivers (added 18-Sep-2020)
    Effective immediately, the U.S. Department of Agriculture has granted the California Department of Education (CDE) Nutrition Services Division two waivers for the Fresh Fruit and Vegetable Program (FFVP) for School Year 2020–21.
  • COVID-19: CNP Response 47 and Q&A (added 14-Sep-2020)
    The CDE NSD is pleased to announce that on September 11, 2020, the USDA released a new Nationwide Waiver and Q&A related to the Nationwide Waiver to allow SFSP and SSO through December 2020.
  • Cook with Kids! Cooking Event Planner (added 11-Sep-2020)
    A resource for planning cooking and nutrition education for children in the classroom.
  • Local Agency Procurement Review for SY 2020–21 (added 10-Sep-2020)
    A list of program operators scheduled for an off-site local agency procurement review in School Year (SY) 2020–21.

  • Public Safety Power Shutoff Event September 2020 (added 08-Sep-2020)
    Pacific Gas and Electric (PG&E) and Southern California Edison (SCE) have announced that public safety power shutoffs are in progress due to extreme weather and fire danger.
  • SFSP Annual Update 2020–21 (added 08-Sep-2020)
    The California Department of Education (CDE) has opened the Summer Food Service Program (SFSP) Annual Update in the Child Nutrition Information and Payment System (CNIPS) for School Year (SY) 2020–21 (October 1, 2020, through September 30, 2021).
  • September 6, 2020 Statewide Emergency: Fires (added 08-Sep-2020)
    On September 6, 2020, Governor Gavin Newsom issued an emergency proclamation for the counties of Fresno, Madera, Mariposa, San Bernardino, and San Diego County.
  • CFAITC Free Two Day Virtual AgVentura (added 08-Sep-2020)
    The California Foundation for Agriculture in the Classroom (CFAITC) is offering a free two day virtual AgVentura in lieu of the 2020 California Agriculture in the Classroom Conference.
  • Build the Local School Wellness Policy (added 04-Sep-2020)
    The Nutrition Services Division Build the Local School Wellness Policy online course.