Processor Inventory Reconciliation Modification

This management bulletin (MB) provides information and guidance on a one-time change to the October Processor Inventory Reconciliation (Sweeps) Policy (MB NSD-FDP-05-2011) implemented by the California Department of Education Food Distribution Program (FDP). This change is in response to the coronavirus (COVID-19) and changing usage of U.S. Department of Agriculture (USDA) Foods throughout California during School Year (SY) 2019–2020. Rather than moving all remaining processor pounds to the California Excess Account (CAE) in October 2020, as is current policy, this change will leave recipient agencies (RA) with pounds equal to their usage between July and October. The FDP will consider flexibility for extenuating circumstances.

Background

As part of the Sweeps process, each processor submits a list of USDA Foods remaining in each RA’s account on June 30 at the end of the school year. These pounds are called carryover inventory. In California, each RA has from July 1 through October 31 to use their carryover pounds. Currently, any unused carryover pounds remaining after October 31 are transferred into the CAE at the processor and are made available to all RAs on a first come-first served basis.

One-Time Change

For the reconciliation of SY 2019–20 inventory, the FDP will leave each RA with a balance of carryover pounds equal to their usage between July 1, 2020 and October 31, 2020.Any remaining carryover pounds will be transferred to the CAE.

Carryover pounds on June 30 – Pounds used from July 1 to October 31 =
Unused Carryover
Unused Carryover – Number of Pounds used July 1 to October 31 =
Pounds to Sweep

Example

Blue Hills Unified School District (USD) has 10,000 pounds mozzarella at ABC Processor as of June 30. Between July 1 and October 31, they use 3,000 pounds of the mozzarella, leaving them with a balance of 7,000 carryover pounds. We then take the 7,000 remaining pounds and deduct 3,000 pounds (amount used July 1 through October 31) to determine that 4,000 pounds would be swept into the CAE. Blue Hills USD would retain 3,000 carryover pounds for use.

10,000 – 3,000 = 7,000 carryover
7,000 – 3,000 (usage) = 4,000 (to sweep)
3,000 (remain in RA account)

Once the pounds are transferred to the CAE, the entitlement value and administration fee from the prior SY are not recoverable.

If an RA wishes to request pounds from the CAE, a transfer request must be submitted and may require a justification such as a completed processor commodity calculator or identified plan of usage.

Agencies may not transfer carry-over pounds to another agency or processor. All transfers of USDA Foods will come out of the current year’s allocated inventory.

Contact Information

If you have any questions regarding this subject, please contact Jeanette Lund, Processing Consultant, by phone at 916-324-6150 or by email at jlund@cde.ca.gov.