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Paid Lunch Equity Requirement and Calculation Tool


Nutrition Services Division Management Bulletin

Purpose: Policy, Action Required, Beneficial Information

To: School Nutrition Program Sponsors

Attention: Food Service Director, Chief Business Official

Number: SNP-08-2016

Date: April 2016

Reference: U.S. Department of Agriculture Interim Rule: School Food Service Account Revenue Amendments Related to the Healthy, Hunger‑Free Kids Act of 2010 Policy Memoranda SP 39‑2011—Revised; SP 15‑2012; SP 18‑2012; SP 22‑2012; SP 28‑2012; SP 19‑2013; SP 25‑2013; SP 34‑2013; SP 58‑2013; SP 1-2014; SP 15-2014; SP 28-2014; SP 03-2015­—Revised; SP 09-2016; https://www.fns.usda.gov/school-meals/policy/.

Subject: Paid Lunch Equity Requirement and Calculation Tool—Updated Guidance for School Year 2016–17


This Management Bulletin (MB) provides school food authorities (SFA) and local educational agencies participating in the School Nutrition Programs with updated information from the U.S. Department of Agriculture (USDA) Policy Memorandum SP 09-2016 regarding School Year (SY) 2016–17 updated guidance for the Paid Lunch Equity (PLE) requirements in Title 7, Code of Federal Regulations (7 CFR), Section 210.14(e). You can view this Policy Memo on the USDA School Meals Policy Web page at https://www.fns.usda.gov/school-meals/policy.

Background

The USDA published the Interim Rule pertaining to PLE requirements in June 2011, and the California Department of Education (CDE) Nutrition Services Division (NSD) has since communicated PLE requirements and updates to SFAs through various communication channels including e-mails, MBs, training seminars, and statewide conferences. For further background information on PLE, please refer to MB USDA SNP 16-2012, located on the CDE Cafeteria Fund Guidance Web page at http://www.cde.ca.gov/ls/nu/sn/cafefundguide.asp.

The USDA Food and Nutrition Service (FNS) provides annual guidance and a USDA PLE calculator tool (PLE Tool) to SFAs to ensure compliance with PLE pricing requirements. Due to the complexity of PLE pricing requirements, the CDE strongly encourages SFAs to read the USDA PLE Policy Memos and use the PLE Tool(s) to annually comply with the PLE pricing requirements.

These documents are available on the USDA School Meals Policy Web page at https://www.fns.usda.gov/school-meals/policy. Please search for the term “Paid Lunch Equity.”

Enhancements to the Calculation Tool

The USDA allows SFAs that used the average weighted pricing and charged less than the difference between the federal free reimbursement rate and the paid reimbursement rate in SY 2015–16 to use either or both of the following options to meet the PLE requirement:

  1. Raise average paid lunch price, or

  2. Deposit into the cafeteria fund the amount of nonfederal monies equal to the difference between the average weighted price and the price indicated by the PLE Tool

These requirements are intended to ensure that SFAs retain sufficient monies in their cafeteria fund for paid lunches.

The USDA FNS annually provides SFAs with the PLE Tool to assist them with making their price adjustment calculations. The SY 2016–17 PLE Tool has been enhanced to add the following edits and clarifications:

  • Tab 1: Instructions

    • Several tips for completing the PLE Tool

    • Ability to add SFA name to every tab (the tabs do not auto-populate and the SFA name should be added manually to each tab)

  • Tab 2: Annual Unrounded Requirement Finder

    • A correction in the formula for determining the unrounded price requirement from the SY 2010–11 average weighted price to ensure that the carryover calculation from SY 2010–11 is accurate

    • An indication in the PLE Tool when the unrounded price requirement entered for SY 2015–16 is at or above the minimum federal price requirement (i.e., $2.78 for SY 2016–17), directing the user to proceed to the Report tab

  • Tab 3: SY 2016–17 Price Adjustment Calculator

    • The USDA Policy Memo SP 09-2016 indicates no change to Tab 3

  • Tab 4: SY 2016–17 Non-Federal Calculator

    • A correction in the formula in the Non-Federal Contribution Calculator for SY 2016–17 to accurately reflect the target average weighted paid lunch price of $2.78 for SY 2016–17

  • Tab 5: SY 2016–17 Split Price and Non-Federal Calculator

    • The USDA Policy Memo SP 09-2016 indicates no change to Tab 5

  • Tab 6: SY 2016–17 Report

    • Addition of a text box to record the source of nonfederal funds contributed to the cafeteria fund

    • Inclusion of “Exemption Granted” option to the drop-down list to meet the requirements for the PLE method chosen for SY 2016–17

    • An indicator directing SFAs at or above equity to “keep and use the SY 2016–17 Average Weighted Paid Lunch Price recorded below for the next year’s (SY 2017–18) PLE Tool” and to record the SY 2016–17 average weighted paid lunch price when selecting “at or above equity” from the drop-down as the method to meet the PLE requirement for SY 2016–17

All SFAs, whether or not they are seeking a PLE exemption, must annually complete their PLE calculation using the PLE Tool (Excel spreadsheet) or a similar calculation spreadsheet. The PLE Tool is available as an attachment to USDA Policy Memo SP 09-2016, located on the USDA Paid Lunch Equity: Guidance for School Year 2016–17 Web page at https://www.fns.usda.gov/paid-lunch-equity-school-year-2016-2017-calculations-and-tool.

Paid Lunch Equity Exemption

For SY 2016–17, the FNS extended the exemption to the PLE requirement to certain SFAs with a strong financial standing. This exemption is described in MB SNP-22-2015, PLE: Updated Guidance for SYs 2015–16 and 2016–17, located on the CDE Cafeteria Fund Guidance Web page at http://www.cde.ca.gov/ls/nu/sn/cafefundguide.asp.
To qualify for the exemption from the PLE pricing requirements, an SFA must:

  1. Have a certification from the CDE as meeting the new meal pattern requirements

  2. Demonstrate that the required increase to the average paid lunch price or revenue contribution(s) would cause the SFA to exceed their net cash resources (NCR) limitation as defined in 7 CFR, Part 210

  3. Complete the Factors for Consideration form to determine if other necessary or appropriate uses for the SFA’s cafeteria fund exist. This form is available in the Download Forms section of the Child Nutrition Information and Payment System (CNIPS) Form ID SNP-49

The FNS recommends that SFAs review their program operations to determine if funds deposited into their cafeteria fund (through raised prices or contributions from nonfederal sources) can be spent addressing program deficiencies or goals before requesting an exemption.

Requesting an Exemption

All SFAs interested in applying for a PLE exemption, including those SFAs granted an exemption in SY 2013–14 or SY 2014–15, must request an exemption in SY 2015–16 and SY 2016–17. Additionally, all SFAs must provide the CDE with the aforementioned documentation to be considered for the exemption. In order for the CDE to consider the SFA’s request for an exemption from the PLE pricing requirements, the CDE must evaluate all aspects of food service operations including, but not limited to, meal costs and compliance with nonprogram food revenue requirements (e.g., the Smart Snacks in Schools standards).

SFAs must submit their request for a PLE exemption to SNPCafeFundQuestions@cde.ca.gov. State in the subject line PLE Exemption Request for (enter SFA name and the CNIPS identification number) and attach the following documents to the e mail request:

  • The CDE certification letter confirming that the SFA has met the new meal pattern requirements
  • The PLE Tool or similar calculation spreadsheet the SFA used to calculate PLE requirements
  • The SFA’s balance sheets demonstrating their NCR calculations before and after the paid meal price increase(s)
  • The completed PLE Exemption Request: Factors for Consideration form (SNP-49)

After receiving the SFA’s completed PLE exemption request, the CDE will review the request and inform the SFA of its determination.

Contact Information

If you have any questions regarding this subject, please contact the Resource Management Unit by e-mail at SNPCafeFundQuestions@cde.ca.gov.

Questions:   Resource Management Unit | 800-952-5609
Last Reviewed: Tuesday, February 26, 2019
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