Farm to School and School Garden Expenses
Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information
To: School Nutrition Program Sponsors
Attention: Food Service Director, Chief Business Official
Date: July 2015
Reference: Title 2, Code of Federal Regulations (2 CFR), Part 200 (formerly 2 CFR, Part 225); Title 7, Code of Federal Regulations, sections 210.14 and 210.19, and Part 210; U.S. Department of Agriculture Policy Memoranda SP 06-2015 and SP 32-2009
Subject: Farm to School and School Garden Expenses
This Management Bulletin (MB) provides guidance from U.S. Department of Agriculture (USDA) Policy Memorandum SP 06-2015: Farm to School and School Garden Expenses, which explains the permissible use of funds from the nonprofit school food service account (cafeteria fund) to cover expenditures related to farm to school activities and school gardens.
You can access SP 06-2015 on the USDA School Meals Policy Web page at FNS Documents & Resources | Food and Nutrition Service (usda.gov)
The California Department of Education (CDE) ensures that school food authorities (SFA) only use revenue from the cafeteria fund to operate and/or improve the school food service, maintain a financially sound cafeteria fund, and serve nutritious meals that meet meal pattern requirements.
When evaluating expenses (including program food, supplies, labor, equipment, services, educational activities, indirect costs, etc.), SFAs must ensure that the cafeteria fund solely supports the operation or improvement of the food service program, and that all expenses are allowable according to the cost principles detailed in Title 2, Code of Federal Regulations (2 CFR), Part 200, Subpart E, (formerly 2 CFR, Part 225, Appendix A).
Determining if School Garden or Other Farm to School Activity Costs Are Allowable
When assessing whether costs associated with school gardening or other farm to school activities are an allowable expense from the cafeteria fund, the SFA should consider the following:
- Are the farm to school activities or school garden development (including purchasing garden supplies and equipment) supporting the operation or improvement of the school meal program, and are the expenses reasonable?
- Is the SFA currently providing meals that are in compliance with the National School Lunch Program (NSLP) and School Breakfast Program (SBP) meal patterns?
- Is the SFA in compliance with Title 7, Code of Federal Regulations (7 CFR), Section 210.14?
- Is the SFA in compliance with their net cash resource limitation?
- If in excess of their net cash resource limitation, how does the SFA plan to spend down the excess?
- Is the SFA in compliance with their net cash resource limitation?
- Will funding a staff position or activities related to nutrition education, school gardening, or farm to school support the operation or improvement of the NSLP and/or SBP?
Note: Salaries for staff positions strictly supporting horticulture classes, Future Farmers of America clubs, or other school associations are not allowable charges to the cafeteria fund.
If SFAs have further questions after completing this assessment, please contact the Resource Management Unit (RMU) by email at SNPCafeFundQuestions@cde.ca.gov. If SFAs do not have any further questions and have concluded that the costs are allowable, then they should document their rationale and keep it with their purchase order. Even after the SFA completes this analysis, it is essential that the SFA continually assesses their costs to ensure the ongoing financial integrity of the cafeteria fund.
Allowable Costs for Farm to School Activities or the School Garden or School Farm
SFAs can use cafeteria funds to buy supplies and equipment for the school garden or school farm as long as the farm to school activities and school garden or school farm are used within the context of the school meal program and serve the purpose of operating or improving the school nutrition programs (SNP).
Examples of allowable supply costs include:
- Water cans
These items are allowable with the understanding that the products grown in the school garden or school farm are to be used within the context of the SNPs. Equipment, as defined below, requires prior CDE approval before incurring the cost, unless the equipment has been identified in the USDA Capital Expenditure Approved List, which is located on the CDE Cafeteria Fund Guidance Web page at Cafeteria Fund Guidance - School Nutrition (CA Dept of Education).
Please note that moveable structures (e.g., hoop houses, high and low tunnels) are classified as a supply or equipment depending on the acquisition cost. Equipment, according to 2 CFR, Section 200.33 (formerly 2 CFR, Part 225, Appendix B, Item 15), is defined as:
An article of nonexpendable, tangible personal property with a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the governmental unit, or $5,000.
Unallowable Costs for Farm to School Activities or the School Garden or School Farm
Capital infrastructure costs such as the construction of a greenhouse or other types of building structures for farm to school activities or the school garden or school farm are not an allowable charge to the cafeteria fund.
Specifically, 7 CFR, Section 210.14(a) states:
Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by [USDA] FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under Section 210.19(a) of this part. [emphasis added]
State law aligns with the regulation cited above. Specifically, California Education Code, Section 38100 states:
The cost of providing adequate housing for cafeterias, including, but
not limited to, kitchen facilities, is a charge against the funds of the school district.
Using Products Grown in the School Garden or School Farm
SFAs have three options for using school garden products in school meals when the school garden or school farm is used by other entities in addition to the food service program. All three options assume the following conditions:
- The school garden or school farm is used by the food service and at least one other entity.
- The entities have negotiated a division of the school garden output between themselves based on each entity’s contribution to the school garden.
If the above conditions are met, the nonfood service entity’s negotiated division of garden produce may be offered or sold to the food service through one of of the following options:
Products that are grown or raised in the school garden can be donated to the food service program and used in meals, or for taste-testing purposes.
- Intergovernmental (or Interdepartmental) Agreements
SFAs can enter into an intergovernmental agreement with a school district operating a school garden or school farm to purchase products from the garden. The entity operating the school garden or school farm must be a local educational agency or another governmental entity. An SFA must conduct a price analysis to ensure that the products purchased from the school garden or school farm are purchased at reasonable prices. The intergovernmental agreement should outline the price for the produce, relative timelines, and expectations regarding the roles and responsibilities for both parties. This option is exercised when the school garden or school farm is operated by the school district, a department within the district, or by another state or local governmental agency (i.e., local department of agriculture or a state department of agriculture) that wishes to sell produce.
SFAs can conduct procurement for garden produce. The purchase price may fall below the most restrictive applicable small purchase threshold, so the SFA may request a quote from the school garden or school farm operator and other entities. Due to the low transportation cost of garden products, it is likely the price for the products will be competitive with other suppliers. This option is most relevant when the school garden or school farm is operated by a nongovernmental entity (e.g., nonprofit organization) that wishes to sell produce to the school meal programs.
Additional Resources and Information
USDA Policy Memo SP 32-2009: School Garden Questions and Answers provides frequently asked questions and answers regarding the operation of a school garden and the related appropriate uses of an SFA’s cafeteria fund. You can view this policy memo on the USDA School Meals Policy Web page at FNS Documents & Resources | Food and Nutrition Service (usda.gov) .
For more information about the cafeteria fund, please visit the CDE Cafeteria Fund Guidance Web page at Cafeteria Fund Guidance - School Nutrition (CA Dept of Education).
If you have any questions regarding this subject, please contact the RMU by email at SNPCafeFundQuestions@cde.ca.gov.