End Product Approval and Sales Monitoring

This Management Bulletin (MB) clarifies the California Department of Education’s (CDE) responsibility to approve commercial end products for processing and monitor the sales of commercial end products to recipient agencies (RA) participating in the U.S. Department of Agriculture (USDA) Foods processing program.

Approval of End Products

In agreement with the California State Processing Agreement, the CDE is responsible for approving the Summary End Product Data Schedule (SEPDS). The SEPDS outlines the list of approved end products that an approved USDA Foods processor is allowed to sell to RAs in California. The CDE is also responsible for approving the End Product Data Schedule (EPDS) of all in-state processors except those that process beef, pork, and poultry, which must be approved by the USDA’s Agricultural Marketing Service.

While the CDE is not obligated to approve every end product produced by a processor, the CDE should work with RAs and processors to ensure that approved EPDS and SEPDS contain end products that meet the new National School Lunch Program meal pattern requirements.

Monitoring End Product Sales

In reviewing processor’s Monthly Performance Reports (MPR), the CDE must ensure that only end products listed on the EPDS or SEPDS are sold to eligible RAs. An eligible RA must be approved to participate in the Food Distribution Program and have USDA Foods inventories at the processor, en route to the processor, or on order for purchase and delivery. 

When end products are sold through a distributor, it is the processor’s responsibility to:

• Inform the distributor if an RA is eligible to receive end products
• Draw down the USDA Foods inventory for every RA
• Ensure that the distributor is informed of every RA’s current inventory levels

If this information is not provided to the distributor, the processor may be held liable for sales made to ineligible RAs or for sales made with insufficient inventory levels. The processor must also ensure that distributors report sales of end products timely, so that inventory levels and end product sales are correctly reported on the MPRs.

Restitution for the Value of USDA Foods Losses

According to Title 7, Code of Federal Regulations, sections 250.33(c), if a processor or distributor sells end products that have not been approved by the CDE or sells end products to ineligible RAs, the CDE must ensure that restitution of inventory is made for the entire quantity of the USDA Foods contained in the end product(s) that were improperly sold. Restitution by the processor may be made in one of the following ways:

• Replace the quantity of the USDA Foods loss with an equal quantity of commercially purchased foods of the same generic identity, of U.S. origin, and of equal or better quality in all USDA purchase specifications

• Pay the CDE for the full value of the USDA Foods contained in the end product(s)

If you have any questions regarding this MB, please contact Jeanette Lund, Processing Consultant, Distribution and Processing Unit, by phone at 916-324-6150 or by e-mail at jlund@cde.ca.gov.