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Paid Lunch Equity Requirement and Calculation Tool

Nutrition Services Division Management Bulletin

Purpose: Policy, Action Required, Beneficial Information

To: All School Nutrition Program Sponsors

Attention: Food Service Directors, School Business Officials

Number: SNP-20-2014

Date: October 2014

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, and SP 28-2014

Subject: Paid Lunch Equity Requirement and Calculation Tool—Updated Guidance for School Year 2014–15

This Management Bulletin (MB) provides school food authorities (SFA) (local educational agencies participating in the School Nutrition Programs) with updated information from U.S. Department of Agriculture (USDA) Policy Memorandum SP 28-2014 regarding School Year (SY) 2014–15 updated guidance for the Paid Lunch Equity (PLE) requirements in Section 205 of the Healthy, Hunger Free Kids Act of 2010.


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 communicated PLE requirements and updates to SFAs through 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 PLE Requirement—Updated Guidance Web page at

Due to the complexity of the PLE requirements, the CDE strongly encourages SFAs to read the USDA’s PLE Policy Memos and use the USDA’s PLE calculation tools to comply with paid lunch pricing requirements.

These documents are available on the USDA School Meals Policy Memos Web page at Please search for the term “Paid Lunch Equity.”

Enhancements to the Calculation Tool

SFAs that used a weighted pricing average and charged less than the difference between the federal free reimbursement rate and the paid reimbursement rate in SY 2013–14 were allowed two options. The SFA could choose to 1) raise their average paid lunch price, or 2) deposit nonfederal monies into their Cafeteria Fund in an amount equal to what the Cafeteria Fund would have gained by raising meal prices. These requirements are intended to ensure that SFAs provide sufficient monies into their Cafeteria Fund for paid lunches.

The USDA Food and Nutrition Service (FNS) annually provides the PLE tool to assist SFAs with making their price adjustment calculations. The SY 2014-15 USDA PLE tool has been enhanced to include the following new features:

  • An option for SFAs that wish to meet the SY 2014–15 price adjustment requirement by both raising prices and contributing from a nonfederal source. This option may be attractive to SFAs that do not want to raise paid lunch prices to the level that would otherwise be required.
  • A credit or shortfall calculation for SFAs that made adjustments to paid lunch prices in SY 2013–14.
  • A credit or shortfall calculation for SFAs that opted to contribute nonfederal funds in SY 2013–14. The PLE tool also calculates credits and shortfalls for the SY 2014–15 required nonfederal source contribution.
  • An option to determine if an SFA made an accurate contribution of nonfederal funds in SY 2013-14. If an SFA’s SY 2013–14 estimate of the required contribution exceeded the actual required amount, the SFA may subtract the excess amount from the total contribution required for SY 2014–15. If the SY 2013–14 estimates were less than required, the SFA must deposit additional funds from nonfederal sources into their Cafeteria Fund.
  • A tracking report for SFAs to track the information needed to make calculations for SY 2015–16 and future years.

All SFAs, regardless of whether they are seeking a PLE exemption, must annually complete the PLE calculation using a similar calculation spreadsheet or the USDA PLE tool (Excel spreadsheet). The USDA PLE tool is available as an attachment to USDA Policy Memo SP 28 2014, located on the USDA Paid Lunch Equity: Guidance for School Year 2014–15 Web page at

Paid Lunch Equity Exemption

For SY 2014–15, the FNS extended the exemption to the PLE requirement for certain SFAs with a strong financial standing. This exemption is described in MB USDA-SNP-18-2013, located on the CDE PLE Requirement—SY 2013–14 Update Web page at

The FNS provides an exemption from the PLE requirements for SFAs that meet certain conditions. To qualify for the exemption, an SFA must:

  1. Have 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 resource (NCR) limitation as defined in Title 7, Code of Federal Regulations, Section 210.14(b)
  3. Explain how the additional revenue to their Cafeteria Fund would not be better spent improving their school meal program

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

Requesting an Exemption

If an SFA believes that raising the average paid lunch price will result in an NCR violation and that the additional revenues cannot be spent improving the school meal program, then the SFA can submit a request to the CDE to waive the PLE requirement.

SFAs must submit their request for a PLE exemption by e mail to The e mail subject line should state the following: PLE Exemption Request from (enter SFA name and the Child Nutrition Information and Payment System [CNIPS] identification number here).

The SFA must attach the following documents to the e mail request:

  • A copy of the CDE certification letter confirming that the SFA has met the new meal pattern requirements
  • A copy of the USDA PLE tool or similar calculation spreadsheet that the SFA used to calculate their PLE requirements
  • Balance sheets demonstrating the SFA’s NCR before and after the price increase
  • A completed PLE Exemption Request: Factors for Consideration form

The PLE Exemption Request: Factors for Consideration form is available in the Download Forms section of the CNIPS, Form ID SNP-49.

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

Contact Information

If you have any questions regarding this MB, please contact the CDE NSD Resource Management Unit by e-mail at

Questions:   Resource Management Unit | 800-952-5609
Last Reviewed: Wednesday, March 7, 2018
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