Supply Chain Assistance FundsThe Supply Chain Assistance (SCA) funding allocations provide eligible school food authorities (SFA) with additional federal funds to help address challenges due to supply chain disruptions in the school meal programs.
In School Years (SY) 2021–22 and 2022–23, many operators of the National School Lunch Program (NSLP) and School Breakfast Program (SBP) have experienced unprecedented challenges in purchasing and receiving food through their normal distribution channels. Supply chain issues have significantly impacted an SFA’s ability to procure nutritious foods for NSLP and/or SBP meal service. Shortages and price fluctuations have made it difficult for SFAs to meet the NSLP/SBP nutrition and meal pattern requirements.
As a result, on December 17, 2021, the U.S. Department of Agriculture (USDA) announced approximately $115 million for the California Department of Education (CDE) to allocate as supply chain relief to all eligible SFAs in California through Policy Memo SP 03-2022. In addition, on July 7, 2022, the USDA announced a second round of approximately $108 million for the CDE to allocate as supply chain relief to eligible SFAs in California through Policy Memo SP 15-2022. The SCA funds are a critical source of funding that will provide an additional financial resource for SFAs to purchase domestic, unprocessed or minimally processed food products as part of their effort to respond to the widespread supply chain disruptions, enhance efforts to strengthen local food supply chains, and help SFAs overcome financial and operational barriers while maintaining children’s access to nutritious meals.
SCA funds are only available to SFAs (including school districts, county offices of education, charter schools, private nonprofit schools, Residential Child Care Institutions, and tribal schools [such as those administered through the Bureau of Indian Education]) currently operating the NSLP and/or SBP. SFAs that do not operate these Child Nutrition Programs are not eligible to receive SCA funds.
Funding is noncompetitive. Program sponsors of the NSLP or the SBP must register their interest in receiving these funds via an online survey (attestation statement) by the deadline. The attestation statement web link will be posted on the Guidelines tab when it is available.
Eligible SFAs intending to accept the second round of SCA funding allocation who did not sign the attestation for the first round must sign and submit the attestation statement.
No action is required for agencies that already submitted an attestation for the first round of funds in the spring of 2021. The second round of funds will be issued automatically based on the same formula as the first round. If agencies received the first round of funds and do not want to receive the second round, they may send an email to the SCA Funds Team at SCAFunds@cde.ca.gov to indicate their desire to opt-out.
The attestation statement is intended to ensure that the funding recipient:
- Is experiencing a supply chain disruption and financial difficulties related to such;
- Will use SCA funds only for purchasing unprocessed or minimally processed domestic food products; and
- Will continue to observe all existing Program requirements regarding recordkeeping and accountability in connection with the use of their SCA funding.
The attestation will take less than five minutes to complete. The attestation must be completed and submitted by 5:00 p.m. on September 14, 2022. Late submissions will not be accepted.
The required attestation is available on the CDE attestation web page.
SCA funds may only be deposited into the nonprofit food service account (NPFSA) of the SFA for which the funds were intended. However, once deposited into the NPFSA, they do not need to be separated from other monies within the account or tracked separately from an accounting standpoint.
The use of SCA funds will be reviewed and monitored in the same manner as other funds within the NPFSA. SFAs are required to maintain documentation supporting allowable food purchases (i.e., unprocessed or minimally processed domestic food products) equal to or greater than the amount received, and consistent with the regular program recordkeeping requirements.
State-level Funding Distribution
The USDA has allocated a first round of $115,356,821 and a second round of $108,488,700 in SCA funds to the CDE. This amount was determined by the USDA based equally on: 1) student enrollment data, and 2) annualized program earnings data.
The CDE will allocate SCA funds to all eligible SFAs who accept the funding and conditions through the attestation by the specified due date.
The CDE will allocate the $115,356,821 and $108,488,700 in SCA funding to SFAs based on a predetermined formula established by the USDA. The predetermined formula includes two components: a base payment of $5,000 to all eligible SFAs, and a proportional funding amount based on each SFA’s share of statewide student enrollment. The base payment of $5,000 is intended to ensure that the smallest SFAs receive a meaningful level of funding. The proportional amount is intended to provide resources that scale with the size of the student population served by an SFA.
SFAs will be required to submit their total enrollment for all NSLP, SBP, and Seamless Summer Option (SSO) sites under their sponsorship in the attestation statement. This enrollment data will then be verified against the information contained in CDE’s reporting database for accuracy and used in the payment calculations.
SFAs that accept their SCA funding through the attestation statement will receive a notification email. This notification letter will include the SFA’s calculated payment amount and information on the proper use of the funds. The notification letters will be sent after the attestation statement deadline has passed.
SCA funds must be used exclusively for the purchase of domestic food products (also known as commodities) that are unprocessed or minimally processed for use in school meal programs, specifically the NSLP, SBP, Seamless Summer Option, and NSLP Afterschool Snacks. Examples of allowable food products are:
- fluid milk
- fruits and vegetables (including 100 percent juices)
- grain products such as pastas and rice
- meats (whole, pieces, or food items such as ground meats)
- foods in a wide variety of minimal processing states (e.g., whole, cut, pureed, etc.) and/or forms (e.g., fresh, frozen, canned, dried, etc.)
Incidental costs (such as those related to shipping and handling or packaging) that are a part of the normal or customary purchase price charged by a vendor for any given food product are also an allowable use of SCA funds.
The steps SFAs must take to ensure the domesticity of food products purchased with SCA funds is consistent with the measures taken for all other purchases in the school meal programs (per existing Buy American requirements). The difference is that the limited exceptions provided under the NSLP Buy American provision may not be used since all products must be domestic.
Current and Future Expenses Only:
SCA funds may only be used for current/future expenses. This may include new obligations, or bills on prior unpaid obligations that come due following the receipt of SCA funds. An example of the latter would be an SFA that signed a purchasing contract for milk before the start of the 2021-22 school year that is paid for on a monthly basis. If SCA funds are received by the SFA on May 1, 2022, the SFA could pay invoices for milk that are due on or after that date.
Foods that are generally understood to be significantly processed or prepared may not be purchased using SCA funds. For example:
- baked goods such as breads, muffins, or crackers
- pre-packaged sandwiches or meals
- prepared and/or pre-cooked items such as chicken nuggets, that come ready-to-eat or that require no further preparation beyond heating
- nondomestic food products
To further illustrate, crushed tomatoes, shredded cheese, whole-wheat flour, and sliced vegetables are all food items that are individually allowable, but a pre-made pizza comprised of those ingredients would not be allowable.
Additionally, SCA funds may not be used to cover the cost of past expenditures, or for labor, supplies, or administrative expenses.
Frequently Asked Questions (FAQ)
The USDA has developed two comprehensive question and answer guides pertaining to the SCA funds.
Access the SP 03-2022 Questions and Answers document (Attachment A) on the USDA Allocation of Supply Chain Assistance Funds to Alleviate Supply Chain Disruptions in the School Meal Programs web page (PDF).
Access the follow-up SCA funds Questions and Answers document on the USDA Allocation of Supply Chain Assistance Funds to Alleviate Supply Chain Disruptions in the School Meal Programs web page (PDF).
On March 24, 2022, the CDE hosted a presentation to share information about the SCA funds. To access the Power Point from this presentation, please select: SCA Funds Presentation (PPT; 252 KB).