Provision 2

Background

P2 requires schools to serve meals to participating students and reduces household meal application burdens to once every four years. It also simplifies meal counting and claiming procedures by allowing a school to receive meal reimbursement based on claiming percentages. Additional four-year extensions of P2 are possible when certain conditions are met.

Requirements

Federal Regulations

Title 7, Code of Federal Regulations (7 CFR), Section 245.9(b), Special assistance certification and reimbursement alternatives outlines federal regulations pertaining to P2.

Base Year Review

The base year is the first year of the P2 four-year cycle. The base year must begin at the start of the school year [7 CFR, Section 245.9(b)(6)(i)]. During the base year, school food authorities (SFA) determine meal eligibility for all students and claim meals by the free, reduced-price, and paid meal types. The base year data is used to determine the level of federal and, if applicable, state funding that the SFA will receive over the course of the P2 cycle. The U.S. Department of Agriculture (USDA) requires the CDE to conduct a review of certification and benefit issuance documentation during the base year for any SFA establishing a new P2 cycle to ensure compliance with federal meal counting and claiming requirements and to ensure that the SFA is aware of recordkeeping requirements.

As required by 7 CFR, Section 245.12(h), the CDE shall take action to ensure the proper implementation of P2. If the CDE determines that an SFA has not correctly implemented P2, the CDE may return the SFA to standard eligibility determination and meal counting procedures. Improper implementation of P2 may include but is not limited to failing to process household meal applications, incorrect processing of household meal applications which result in an error rate of five percent or greater, incorrect counting and claiming of meals, or verification procedures were incorrectly implemented.

A P2 base year review may result in fiscal action. California Education Code Section 49501.5 provides public school districts, county offices of education, and charter schools with additional state meal reimbursement for compliant meals served under the National School Lunch Program and School Breakfast Program. If the P2 base year review shows that the SFA has failed to meet state and federal requirements and guidance, the CDE may disallow state and/or federal meal reimbursement.

For detailed guidance on the P2 Base Year Review, please reference CDE Management Bulletin SNP-11-2025: Mandatory Review of Provision 2 Base Year.

Recordkeeping

As required by 7 CFR, Section 245.9(h)(1), SFAs must retain records and base year data during the period that P2 is in effect, including all extensions. In addition, such records must be retained for three fiscal years following the submission of the last claim for reimbursement of the final fiscal year which employed base year data. Base year records include, but are not limited to, the following:

• All approved and denied free and reduced-price household meal applications
• Direct certification data
• Changes in eligibility status as a result of verification or other reasons
• Daily meal counts, by type
• Calculation of claiming percentages
• Attendance areas of each school participating in P2
• Socioeconomic base year data for use in requesting an extension
• Any extension authorizations from the CDE
• Edit check and on-site review documentation
• Verification records
• Claims for reimbursement

P2 non-base years are years two through four of a P2 cycle, plus all extension years. Non-base year records must be retained for three years after submission of the final claim for reimbursement for the fiscal year to which they pertain. Non-base year records include records of total daily meal counts of reimbursable meals, edit checks, and on-site review documentation.

SFAs that receive a P2 extension must retain records of the socioeconomic data used to determine the income level of the school’s population for the base year and year(s) in which extension(s) were made. Such records must be retained during the period the Provision was in effect, including all extensions, plus three fiscal years after the submission of the final claim for reimbursement for the fiscal year which employed base year data.

If review or audit findings have not been resolved, the records must be retained as long as required for the resolution of the issues raised by the review or audit. Also, the CDE may require that SFAs retain additional records or may impose longer record retention time frames for schools under P2.

Failure to maintain base year and subsequent year records will result in corrective action, including, but not limited to, requiring the school to establish a new base year or return to standard meal counting and claiming procedures. In addition, lack of required records may result in the calculation of an overclaim extending back through the base year.

Internal Controls

SFAs participating in P2 are required to establish a system of oversight to ensure accuracy of the monthly claim for reimbursement. At a minimum, SFAs must ensure internal controls meet the requirements of 7 CFR, Section 210.8, Claims for Reimbursement.

During base years, SFAs must have processes in place to ensure accurate meal counts by eligibility type, as these will be used to establish claiming percentages. SFAs in non-base years must establish processes to compare each school’s total daily meal counts to its enrollment, adjusted by an attendance factor, per 7 CFR, Section 245.9(b)(4). If the claim review suggests the likelihood of lunch count problems, the SFA must provide the site with technical assistance, correct the claim prior to submission, and ensure processes and internal controls have been updated to avoid issues in the future.

Refer to the USDA P2 Guidance Manual , page 13, and Appendix C, page 56, for information on the requirements for internal controls.

Notification of Expiration of P2 Cycle

The CDE will send written notification to P2 SFAs operating the last year of their P2 cycle that they must either return to standard eligibility determination and meal counting procedures or apply for an extension under P2, per 7 CFR, Section 245.12(h)(1).

School sites may be eligible for an extension of a P2 cycle if the socioeconomic status of the school population compared to the base year remained the same, declined, or improved by no more than five percent. Refer to the USDA Provision 2 Guidance: National School Lunch and School Breakfast Programs page 25, for information on calculating changes in the socioeconomic indicator.

Resources

U.S. Department of Agriculture (USDA) Guidance

• Provision 2 Guidance: National School Lunch and School Breakfast Programs
  USDA guidance manual for operating P2. This manual includes guidance for all P2 requirements.
  
  
• Provisions 1, 2, and 3
  USDA School Meals web page. This web page provides simplified P2 guidance as well as a link to the USDA P2 Guidance Manual.

CDE Guidance

• CDE Management Bulletin SNP-11-2025: Mandatory Review of Provision 2 Base Year
  This management bulletin provides guidance on the mandatory review of the P2 base year.

Provision 2 Training Video

The SNP Provision 2 Overview for school food authorities (SFA)s training video provides guidance about the important basics and benefits of P2, as well as what is required of the SFA, throughout the entire P2 process. SFAs applying to participate in P2 must watch the training video and obtain the Certification of Completion no later than June 30th prior to the school year in which they are requesting to participate.

The P2 training video is accessible through the Nutrition Services Division (NSD) Learning Site. The NSD Learning Site is available to Child Nutrition Program (CNP) operators, which includes directors, managers, and both full and part-time staff. SFAs must set up an account before taking the training course. After setting up an account, enter "Provision 2" in the search field to be directed to the P2 training. For help setting up an account on the NSD Learning Site, please download the LMS 001 - LMS Account Set Up Job Aid located in the CNIPS Download Forms section. For questions or support, contact the NSD Learning Site team at NSDLearning@cde.ca.gov.

Forms

All P2 forms are located in the Download Forms section of the CNIPS.

Policy Statement Addendum – Provision 2 Implementation – New Cycle (Form ID SNP-13)

This form is used to apply for P2 and amend certain provisions and procedures to reflect current practices for schools requesting to participate in P2.

Schools must apply to participate in P2 no later than June 30th prior to the school year in which they are requesting to participate and receive CDE approval prior to the beginning of the base year [Title 7, Code of Federal Regulations, Section 245.9(b)(6)(i)].

Provision 2 Calculation Guide (Form ID SNP-16)

This guide contains examples of how to calculate monthly, annual, and district-wide claiming percentages.

Provision 2 Claiming Calculation Worksheet (Form ID SNP-17)

This form assists schools in tracking monthly percentages from the base year forward to the end of the P2 cycle.

Extension Request – Claiming Alternatives, Provision 2 (Form ID SNP-15a)

This form is used for schools with an expiring P2 cycle to request an extension.

P2 cycle renewals are not automatic. The district must inform the CDE if the school wishes to continue participating in P2 or revert to standard meal counting and claiming procedures.This form, along with SNP-15b, must be submitted no later than June 30th of the expiring year, and be approved by the CDE prior to the start of the new school year.

Provision 2 Extension Worksheet Using Direct Certification or Meal Applications (Form ID SNP-15b)

This form must be submitted with the SNP-15a Extension Request and is used for schools using direct certification or meal applications as the socioeconomic data to request an extension.

Student level data used to support this document must be retained and available for inspection during the Administrative Review.

Streamlined Base Year Request – Provision 2 (Form ID SNP-14)

This form is used for schools that applied for, and did not receive, a P2 extension. Instead of completing procedures for a new base year, in a streamlined base year the school determines program eligibility for a statistically valid sample of either: (1) all enrolled students with access to applicable meal program as of October 31 (enrollment-based), or (2) enrolled students participating in the applicable meal program (participation-based). All children must be offered meals at no charge during a streamlined base year.

The school must meet the minimum requirements for use of a streamlined base year, and the CDE has the option to approve or deny use of the streamlined base year option. Refer to the Provision 2 Guidance Manual, page 29, for details on a streamlined base year.

P1 & P3

Provision 1 (P1) and Provision 3 (P3) are two lesser used provisions that may assist school food authorities in reducing administrative paperwork associated with the meal program. Schools must apply to participate in P1 or P3 no later than June 30 prior to the school year in which they are requesting to participate and receive CDE approval prior to the beginning of the school year.

For guidance regarding P1 or P3, please contact your SNP Specialist. The SNP County Specialist list is available on the CDE SNP Specialist Directory web page or in the CNIPS Download Forms section, form titled Caseload. You may also contact the SNP Unit by email at SNPInfo@cde.ca.gov.

Additional information on P1 and P3 can also be found on the U.S. Department of Agriculture Provisions 1, 2, and 3 web page.

Frequently Asked Questions (FAQs)

Contact

If you have questions regarding P2, please contact your SNP County Specialist. The SNP County Specialist list is available in the CNIPS Download Forms section, Form ID Caseload. You may also contact the SNP Unit by email at SNPInfo@cde.ca.gov or the P2 email inbox at Provision2@cde.ca.gov.