Release of LEA Second Review of Applications Rpt.

The U.S. Department of Agriculture (USDA) issued Policy Memorandum SP 62-2014: Release of the New Local Educational Agency Second Review of Applications Report  (Food and Nutrition Service [FNS]-742a) to provide information explaining required documentation of the results of the second review of applications in the National School Lunch Program (NSLP) and School Breakfast Program (SBP). The primary purpose of form FNS-742a is to capture data related to the second review of applications required by the final rule, National School Lunch Program: Independent Review of Applications Required by the Healthy, Hunger-Free Kids Act of 2010, published February 6, 2014. Form FNS-742a will capture annual program data for each school food authority (SFA), including the number and type of errors that contribute to incorrect eligibility determinations, for each SFA required to complete a second review of applications.

Background Information

On February 6, 2014, the USDA issued the final rule titled National School Lunch Program: Independent Review of Applications Required by the Healthy Hunger Free Kids Act. This final rule, effective March 10, 2014, requires local educational agencies (LEA) that demonstrate high levels of, or a high risk for, administrative error associated with eligibility determinations to conduct a second review of all free, reduced-price, and paid applications before households are notified of eligibility status. The USDA expects a reduction of administrative errors in eligibility determinations for free and reduced-price school meals as a result of the final rule. On April 30, 2014, the USDA issued Policy Memorandum SP 44-2014: Questions and Answers Related to the Independent Review of Applications, which provides additional information on these requirements. You can access SP 44-2014 on the USDA School Meals Policy Web page at http://www.fns.usda.gov/school-meals/policy.

The USDA mandated the first criterion and grants state agencies the authority to select additional criteria. The California Department of Education (CDE) changed the selection criteria for LEAs that will need to report their data to the CDE beginning with School Year (SY) 2014–15 as detailed below.

Criteria Used to Determine Agencies Required to Conduct a Second Review of Applications

The CDE will identify LEAs required to conduct a second review of applications using two criteria, with the first criterion mandated by the USDA and the second defined by the CDE under the authority granted by the USDA.

Beginning with SY 2014–15, the CDE implemented the following selection criteria:

1. LEAs with a 10 percent or greater certification/benefit issuance error rate, as determined by the CDE during their most recent School Nutrition Programs (SNP) administrative review (AR) (USDA-mandated criterion).
   
   
2. LEAs that are new to the NSLP and SBP. This is defined as an LEA that submits a new application, regardless of prior participation in the program (CDE criterion).

The CDE Field Services Unit will annually notify LEAs by June 30 if they are determined to be high-risk and subject to a second review of applications based on the two criteria above. The CDE is required to submit a report describing the results of the second review of applications to the USDA FNS by March 15 of each year.  

What Local Educational Agencies Need to Do

Those LEAs required to conduct a second review of applications, using the CDE’s selection criteria mentioned above, must conduct the review annually until they demonstrate to the CDE that no more than 5 percent of reviewed applications required a change in eligibility determination. Documentation must be submitted to the CDE by February 1 through submission of specific eligibility data on the SNP Agency Second Review of Applications Report, Form ID SNP-SFA FNS-742A.

In accordance with Title 7, Code of Federal Regulations, Section 245.11(b)(2)(i–iv), form FNS-742a will collect all of the following:

1. The total number of free, reduced-price, and paid applications subject to a second review
   
   
2. The total number of applications for which the eligibility determination was changed due to the second review process
   
   
3. The percentage of applications for which the eligibility determination was changed
   
   
4. A summary of the types of errors that resulted in a change to the original eligibility determination; for example, incomplete application, gross income calculation error, and categorical eligibility error

The second review of applications does not change the LEA’s responsibility to notify their selected households of the eligibility or ineligibility determination of free or reduced-price meals within 10 operating days of receiving the application.

Effective immediately, LEAs selected by the CDE must annually submit a Local Educational Agency Second Review of Applications Report (Form ID SNP-SFA FNS-742a) to the CDE by e-mail at NSDDATAREQUEST@cde.ca.gov by February 1. The data must include all current school year applications certified by the LEA on or before October 31. This reporting form and instructions can be accessed in the Child Nutrition Information and Payment System by selecting Applications and then Download Forms.

Resources and Information

LEAs can view the final rule in its entirety on the USDA Final Rule: National School Lunch Program Independent Review of Applications Required by the Healthy, Hunger-Free Kids Act of 2010 Web page at https://www.fns.usda.gov/school-meals/fr-020614.

The USDA Eligibility Manual for School Meals, Determining and Verifying Eligibility (August 2014), Part 3, page 40, provides more guidance on the independent review of applications. LEAs can download the USDA Eligibility Manual for School Meals from the USDA Guidance and Resources Web page at http://www.fns.usda.gov/school-meals/guidance-and-resources/.

LEAs can download SP 62-2014, New LEA Second Review of Applications Report from the USDA School Meals Policy Web page at http://www.fns.usda.gov/school-meals/policy.

Contact Information

If you have any questions regarding this Management Bulletin, please contact the Nutrition Services Division Field Services Unit by phone at 916-323-4558 or 800-952-5609.