Administrative Reviews in the School Nutrition Programs
Federal Register, Volume 80 Issue 90 (Monday, May 11, 2015)
Federal Register Volume 80, Number 90 (Monday, May 11, 2015)
Proposed Rules
Pages 26846-26870
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2015-10613
Page 26846
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 210, 215, 220 and 235
FNS 2014-0011
RIN 0584-AE30
Administrative Reviews in the School Nutrition Programs
AGENCY: Food and Nutrition Service, USDA.
ACTION: Proposed rule.
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SUMMARY: In accordance with provisions of the Healthy, Hunger-Free Kids Act of 2010, this proposed rule would revise the State agency's administrative review process to establish a unified accountability system designed to ensure that participating school food authorities comply with the National School Lunch Program and School Breakfast Program requirements. The proposed administrative review process would include new procedures, retain key existing requirements from the Coordinated Review Effort and the School Meals Initiative, provide new review flexibilities and efficiencies for State agencies, and simplify fiscal action procedures. In addition to the new administrative review process, this rule proposes to require State agencies to report and publicly post school food authorities' administrative review results. These proposed changes are expected to strengthen program integrity through a more robust, effective, and transparent process for monitoring school nutrition program operations.
DATES: To be assured of consideration, written comments on this proposed rule must be received by July 10, 2015.
ADDRESSES: The Food and Nutrition Service (FNS), USDA, invites interested persons to submit written comments on this proposed rule. Comments must be submitted through one of the following methods:
Preferred method: Federal eRulemaking Portal at http://www.regulations.gov. Follow the online instructions for submitting comments.
Mail: Mailed comments on this proposed rule must be postmarked on or before July 10, 2015 to be assured of consideration. Send mailed comments to Julie Brewer, Child Nutrition Policy and Program Development Division, Food and Nutrition Service, Department of Agriculture, 3101 Park Center Drive, Room 1212, Alexandria, Virginia 22302-1594.
Comments received by other methods will not be accepted. All comments received by the methods listed above will be included in the record and will be made available to the public. Please be advised that the substance of the comments and the identity of the individuals or entities submitting the comments will be subject to public disclosure. FNS will make the comments publicly available on the Internet via http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Lynn Rodgers-Kuperman, Child Nutrition Monitoring and Operations Support Division, Food and Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia 22302; telephone: (703) 605-3223.
SUPPLEMENTARY INFORMATION:
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Background
Federally supported school nutrition programs are operated each school day in 54 States, by more than 100,000 schools and Residential Child Care Institutions. Ensuring that the programs are being carried out in the manner prescribed in statute and regulation is a key administrative responsibility at every level. Federal, State and local program staff share in the responsibility to ensure that all aspects of the programs are conducted with integrity and that taxpayer dollars are being used as intended.
Improving program integrity and reducing improper payments has been a long-standing priority for the Department of Agriculture (USDA). Periodic evaluations of program errors, including the Access, Participation, Eligibility and Certification (APEC) studies, show that improper payments result from errors made in the processes used to determine eligibility for free or reduced price meals, as well as from errors made during daily program operations and meal service. USDA and its State agency partners have invested significant effort in system improvements and process reforms over the last several years that are expected to improve integrity and deliver long-term reductions in error rates. These efforts include on-going technical assistance and implementation of reforms made by Public Law 111-296, the Healthy, Hunger-Free Kids Act of 2010 (HHFKA). Along with provisions aimed at improving program access and healthier school nutrition environments, HHFKA reforms support program integrity through strengthening the use of direct certification, providing for community eligibility, establishing professional standards for school nutrition directors and staff, targeting a second review of applications in districts with high rates of application processing errors, and other provisions. USDA has already implemented the majority of these provisions through separate rulemaking. USDA has also established a new Office of Program Integrity for Child Nutrition Programs within the Food and Nutrition Service.
State agencies that administer the school meal programs play a primary role in ensuring School Food Authorities (SFAs) are properly operating the programs. In addition to training and technical assistance, State agencies are responsible for regularly monitoring SFA operations.
Nearly 25 years ago, in 1991 and 1992, USDA established regulations in 7 CFR 210.18 for an administrative review process to ensure SFAs complied with National School Lunch Program (NSLP) requirements. The process, the Coordinated Review Effort (CRE), required State agencies to conduct on-site administrative reviews of SFAs once every five years, and covered critical and general areas of review. The CRE review focused primarily on benefit eligibility, meal counting and claiming procedures, meal pattern and other general areas of compliance.
In 1995, State agencies began to evaluate the nutritional quality of school meals under USDA's School Meals Initiative (SMI). A key component of the SMI review was the State agency's nutrient analysis of the weekly school meals to determine compliance with Recommended Dietary Allowances for protein, calcium, iron and vitamins A and C; recommended minimum calorie levels; and the Dietary Guidelines for Americans.
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More recently, section 207 of the HHFKA amended section 22 of the Richard B. Russell National School Lunch Act (NSLA), 42 U.S.C. 1769c, to make five changes to the administrative review requirements. The first three were implemented through the final rule, Nutrition Standards in the National School Lunch and School Breakfast Program (77 FR 4088), which was issued January 26, 2012. Those changes involved: (1) Including both National School Lunch Program (NSLP) and School Breakfast Program (SBP) in the administrative review; (2) confirming that the weekly meals offered meet meal patterns and dietary specifications, which made the SMI obsolete; and (3) implementing a new 3-year review cycle. This rule does not propose changes to these three previously promulgated provisions, but instead updates the administrative review procedures to reflect these changes.
This rule proposes to revise the administrative review requirements in 7 CFR 210.18 to implement the remaining two statutory provisions from section 207 of HHFKA, requiring that:
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The administrative review process be a unified accountability system in which schools within an SFA are selected for review based on criteria established by the Secretary; and
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State agencies report the final results of reviews, and post them or otherwise make them available to the public.
This proposed rule largely reflects the updated administrative review process developed by the School Meals Administrative Review Reinvention Team (SMARRT), a 26-member team consisting of staff from Food and Nutrition Service (FNS) Headquarters and the seven Regional Offices, and State Agency staff from Kansas, Michigan, New York, North Carolina, Oregon, Pennsylvania and Texas (representing each of the FNS Regions). FNS assembled the team to carry out HHFKA's mandate for a unified accountability system. The group worked together for one year to develop a simplified, unified monitoring process that includes new, flexible procedures and combines key aspects of the CRE and SMI reviews. The team also sought to create a comprehensive monitoring process that includes all the school nutrition programs. Another priority was to simplify review procedures in response to State agencies' needs.
The proposed administrative review process would:
Promote overall integrity in the school nutrition programs by incorporating key requirements of the CRE and SMI reviews.
Enable the State agency to monitor essential requirements of the NSLP snack service and seamless summer option, the Special Milk Program, and the Fresh Fruit and Vegetable Program while conducting the administrative review.
Include recommended off-site monitoring approaches to offer State agencies the ability to conduct reviews more efficiently by incorporating off-site State agency staff with the skills needed to address specific monitoring areas.
Include risk-based approaches to enable the State agency to target error prone areas and focus its monitoring resources on SFAs and schools needing the most compliance assistance.
Add Resource Management to the general areas of review to better assess the financial condition of the nonprofit food service.
Promote consistency in the review process across all States.
Include updated, user-friendly forms; new risk assessment tools; and statistical sampling for increased State agency efficiency. The forms and tools associated with the proposed administrative review process will be addressed separately in a 60-day notice to be published in the Federal Register to align with the implementing administrative review rulemaking.
The main focus of the proposed administrative review under 7 CFR 210.18 would continue to be the NSLP and SBP, and the State agency would continue to perform existing review procedures but in an updated and more flexible manner. In an effort to create a unified accountability system, the State agency would also be required to monitor the NSLP afterschool snack program and seamless summer option, the Fresh Fruit and Vegetable Program, and the Special Milk Program in a manner that is consistent with the review process established in 7 CFR 210.18, as applicable. Most of the regulatory changes needed to update the administrative review process would be in 7 CFR 210.18. However, this rule would make changes throughout 7 CFR parts 210, 215, and 220 to achieve a unified accountability system for the school nutrition programs. In addition, the rule would remove the definition of ``large school food authority'' from 7 CFR 210.18, where it would no longer be needed, and add it to 7 CFR 235.2, where it would continue to apply. Detailed procedures for the new review process for the NSLP, SBP and other school meal programs are provided in the FNS Administrative Review Manual, which is a guidance document for the State agencies.
This proposed rule would also make several changes to the SFA regulatory requirements to complement the proposed administrative review process. First, the SFA's existing responsibilities in 7 CFR 210.14 would be clarified with regard to indirect costs as they would be specifically monitored by the State agency under the new administrative review process. Second, the SFA annual on-site monitoring of schools, required in 7 CFR 210.8, would be strengthened by incorporating readily observable general areas of review, and by extending SFA on-site monitoring to the SBP. These proposed changes are addressed in more detail later in the preamble.
This proposed rule would also make a number of miscellaneous edits to remove obsolete provisions in 7 CFR part 210, and to update wording to reflect the diversity of certification mechanisms used in school meal programs beyond the traditional collection of household applications. In addition, this rule would update the designation of a form in 7 CFR 210.5(d)(3), 7 CFR 210.20(a)(2), and 7 CFR 220.13(b)(2) by changing the references to the SF-269, final Financial Status Report, to FNS-777, as approved by the Office of Management and Budget.
While this rulemaking action is underway, FNS has allowed the following temporary review options for State agencies. Prior to the finalization of this rulemaking, State agencies may either:
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Seek a waiver of the existing regulatory review procedures pursuant to section 12(l) of the NSLA, 42 U.S.C. 1760(l), and conduct reviews in accordance with the proposed administrative review process and the corresponding Administrative Review Manual; or
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Continue with existing review procedures under 7 CFR 210.18 and the corresponding Coordinated Review Effort Procedures Manual, with the understanding that the proposed rule, once finalized, would require implementation of a new administrative review process.
FNS provided this flexibility to State agencies beginning in School Year 2013-2014. Almost all State agencies have requested the waiver and have adopted the new administrative review process described in this proposed rule. The new process, conducted on a shorter, 3-year cycle, has begun to generate a large volume of high value information that will strengthen FNS and State agency integrity efforts over
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the long term. The data collected through the new review process will enhance the Federal and State agencies' ability to monitor program performance. Just as importantly, the data will be a resource FNS can use in its efforts to develop timely and targeted, evidence-based solutions to the recurring problems that give rise to improper payments.
FNS also anticipates that the experience of State agencies using the updated review process will contribute to informed public comments that guide the development of the implementing rule. When the implementing rule establishing the new unified administrative review system is promulgated, all State agencies will be required to follow the finalized administrative review regulations.
Note: The words ``school'' and ``site'' are used interchangeably in this proposed rule, as applicable to each program, to refer to the location where meals are served. This proposed rule also uses the term SFA to generally refer to the governing body responsible for school food service operations. However, some of those responsibilities are fulfilled by the local educational agency (LEA or district), most notably the certification and benefit issuance process, indirect costs, competitive food sales, and local wellness policies. Use of the term SFA in this proposed rule is not intended to imply the responsibilities reserved for the LEA have shifted to the SFA.
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Overview of the Existing CRE Administrative Review
Currently, State agencies that are not conducting administrative reviews under the new process perform the following administrative review activities under the existing CRE procedures as required in the regulations in 7 CFR 210.18. Under the existing CRE procedures:
State agencies monitor lunches, and must review breakfasts at 50 percent of the schools selected for an NSLP administrative review.
State agencies must review each SFA once during each 3-
year review cycle, with no more than four years lapsing between reviews.
When reviewing an SFA, State agencies conduct on-site reviews of about 10% of those schools participating in the NSLP.
The scope of administrative review covers both critical and general areas. The critical areas, termed Performance Standards 1 and 2, assess whether lunches and breakfasts claimed for reimbursement are served to children eligible for free, reduced price, and paid meals; are counted, recorded, consolidated, and reported through a system that consistently yields correct claims; and meet meal requirements. The general areas assess whether the SFA meets other program requirements related to eligibility for free and reduced price benefits, civil rights, monitoring, reporting and recordkeeping, food safety, and resource management.
State agencies conduct a nutrient analysis of school lunches and breakfasts to assess compliance with calorie requirements, saturated fat, and sodium.
If an SFA has critical area violations in excess of specified review thresholds, a follow-up review is conducted in all large SFAs and in at least 25 percent of small SFAs.
The follow-up review includes the certification, count and service procedures in the Special Milk Program and the afterschool snack program operated by the reviewed schools.
Fiscal action is required for all violations of Performance Standard 1 and specific violations of Performance Standard 2.
Most of these procedures would continue, in some manner, under the proposed rule.
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Overview of the Key Proposed Changes to the Administrative Review
The proposed administrative review under 7 CFR 210.18 would incorporate new and key existing procedures from the CRE and SMI reviews. It streamlines existing review procedures, gives State agencies new review flexibilities, simplifies fiscal action, and includes updated review forms and new tools. This proposed rule would replace the existing CRE and SMI monitoring processes, and is expected to improve program integrity by providing a single, comprehensive, effective, and efficient State agency monitoring process. Specific procedures for conducting the proposed review process are reflected in the FNS Administrative Review Manual.
The key procedures carrying forward from previous CRE and SMI reviews include timing of reviews, scheduling of SFAs, number of schools to review, exit conference and notification, corrective action, withholding payment, SFA appeal of State agency findings, and FNS review activity. These provisions are found in the amendatory language and may include minor non-substantive technical changes in 7 CFR 210.18, but are not discussed in this preamble. The preamble focuses on new key proposed changes, which are discussed next.
Procedures for Conducting a Review
Off-Site and On-Site Review Activities
Under existing 7 CFR 210.18, the administrative review process is a comprehensive on-site evaluation of SFAs participating in the school meal programs. The proposed rule envisions that some administrative review activities can be conducted off-site, rather than during the on-
site portion of the review. Adding the off-site approach is expected to assist the State agency by reducing the State agency's travel time and expense, enabling the State agency to conduct the documentation review and other existing review requirements over a longer period of time than would be possible while on-site, and allowing the reviewer to seek input from specialized State staff for adequate review of complex documentation (e.g., financial staff).
Off-site review activity is especially important for the Resource Management area of review which, as proposed at 7 CFR 210.18(h)(1), would require an off-site evaluation of information to determine if a comprehensive review is necessary. For other areas of review, the off-
site review is strongly recommended but it is not required. Examples of possible off-site review activities include:
Identifying the sites for review using the site selection procedures in the proposed 7 CFR 210.18(e).
Reviewing documentation such as the SFA agreement, policy statement, renewal application, prior review findings and corrective action plans.
Obtaining and reviewing the benefit issuance document.
Selecting student certifications for review.
Examining the SFA's verification procedures.
Reviewing the SFA's counting and claiming procedures and documentation.
Reviewing menus, production records, and related documents.
Reviewing the Offer versus Serve policy.
Identifying the school most at risk for nutrition related violations and conducting a targeted menu review in that school.
Determining the targeted menu review approach.
In addition to the proposed off-site review activity, the on-site review activities will focus on validating the information obtained during the SFA off-site review and those aspects of program operations that can best be reviewed on-site. These types of on-site review activities are discussed in more
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detail under the heading ``Areas of Review.''
Accordingly, the proposed rule adds off-site activity as a component of the administrative review in proposed 7 CFR 210.18(a) and 7 CFR 210.18(b)(1), and requires an off-site review component for the Resource Management area at proposed 7 CFR 210.18(h)(1).
Entrance and Exit Conferences
While some of the review activities can be conducted off-site, an observation of program operations while on-site at the SFA remains a critical component of program oversight. Prior to commencing on-site review activities, States are encouraged to convene an entrance conference with key SFA and, as applicable, LEA staff and administrators with responsibility for ensuring program requirements are followed. This initial conversation can help clarify expectations for the on-site review, raise preliminary issues identified during off-
site review activities, and identify the additional information needed to complete the on-site portion of the review. While not required, this proposed rule supports, at 7 CFR 210.18(i)(1), the option for State agencies to begin the administrative review by conducting an entrance conference with the relevant SFA staff. This provision reflects existing practice. This rule would also retain the existing requirement for the State agency to conduct an exit conference. The proposed rule would codify the exit conference requirement at 7 CFR 210.18(i)(2).
Administrative Review Materials
This rulemaking would require, in proposed 7 CFR 210.18(f)(1), that State agencies use updated forms and tools to conduct the administrative review process. As stated earlier, FNS will issue the updated tools to coincide with the publication of the implementing rule. The new tools include: An Off-site Assessment Tool, an On-site Assessment Tool, a Meal Compliance Risk Assessment Tool, a Dietary Specifications Assessment Tool, and a Resource Management Risk Indicator Tool.
These tools and corresponding instructions are currently available to State agencies on the FNS PartnerWeb, which is a restricted access online portal for State agencies that administer the school meal programs. State agencies can find the tools in the Administrative Review Folder located in the Resources and Guidance document library of the CND Policy and Memoranda Community. When finalized, these tools will also available on the FNS Web site. With the exception of the Resource Management Risk Indicator Tool, which must be completed off-
site, the required administrative review tools may be completed on-
site.
Areas of Review
The proposed administrative review would continue to include critical and general areas which mirror the critical and general areas specified in existing 7 CFR 210.18(g) and (h), with the modifications discussed below.
Critical Areas of Review
Existing 7 CFR 210.18(b) defines, and existing 7 CFR 210.18(g) describes in detail, the critical areas, which are two performance standards that help evaluate compliance with program requirements. Performance Standard 1 (PS-1) focuses on certification for free and reduced price meals, benefit issuance, and meal counting and claiming. Performance Standard 2 (PS-2) focuses on meals meeting the meal pattern and dietary specification requirements. The proposed rule at 7 CFR 210.18(g)(1) and (2) would retain both performance standards but modify how they are monitored as described in the next two subsections of this preamble.
PS-1--Meal Access and Reimbursement
The proposed rule at 7 CFR 210.18(g) retains the existing PS-1, with only minor technical changes. Existing PS-1 refers to ``All, free, reduced price and paid lunches . . . served only to children eligible for free, reduced price and paid lunches . . .'' The proposed rule would replace the term ``lunches'' with the term ``meals'' to include an assessment of both the NSLP and the SBP as required by the amendments made to the NSLA in 207 of the HHFKA.
Existing 7 CFR 210.18(g)(1) has a three-pronged scope of review. The State agency must:
Determine the number of children eligible for free, reduced price and paid meals, by type, in the reviewed schools (hereafter termed ``Certification'').
Evaluate the system for issuing benefits and updating eligible status by validating the mechanisms the reviewed school uses to provide benefits to eligible children (hereafter termed ``Benefit Issuance'').
Determine whether the meal counting system yields correct claims (hereafter termed ``Meal Counting and Claiming'').
The proposed rule would retain the above processes, but streamline and consolidate the Certification and Benefit Issuance review processes to improve program integrity and simplify the review process.
Under proposed 7 CFR 210.18(g)(1)(i), the State agency would be required to:
Obtain the free and reduced price benefit issuance document for each school under the jurisdiction of the SFA for the day of review or a day in the review period.
Review all, or a statistically valid sample of, free and reduced price certification documentation (i.e., direct certifications, household applications) and other documentation relating to eligibility status (e.g., verification, transfers).
Validate that reviewed students' free and reduced price eligibility status was correctly determined and properly transferred to the benefit issuance document.
In addition, the proposed rule expands the scope of Certification and Benefit Issuance review from the reviewed sites to the SFA level in order to provide the State agency with a more accurate picture of the SFA's practices at all schools. The proposed rule requires the State agency to review the free and reduced price certification and benefit issuance documentation for students across the entire SFA. This proposed change reflects that most SFAs have a centralized recordkeeping system; generally certifications are made and benefit issuance is maintained at the SFA level. The advantage of this approach is that it allows certification and benefit issuance errors identified during a review to be corrected at the SFA level.
As permitted under existing 7 CFR 210.18(g)(1)(i)(A)(2), State agencies would continue to have the option of reviewing either all certifications on the benefit issuance documents or a statistically valid sample of certifications. State agencies using a statistically valid sample review fewer student documents and the review yields results representative of the certification and benefit issuance activity in the SFA. The statistically valid sample size may be determined manually, or by using the Statistical Sample Generator developed by FNS or other statistical sampling software. Both options are described in the FNS Administrative Review Manual. The proposed rule at 7 CFR 210.18(g)(1)(i) would retain the statistical sampling confidence level of 95 percent, set forth in existing 7 CFR 210.18(g)(1)(i)(A)(2), for electronic certification and benefit issuance systems. For manual benefit issuance systems, the proposed rule
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would increase the sampling confidence level to 99 percent.
As under existing 7 CFR 210.18(g)(1)(i)(C), the Meal Counting and Claiming portion of the review would continue to ensure that all free, reduced price and paid meals are accurately counted, recorded, consolidated and reported through a system which consistently yields correct claims. Under proposed 7 CFR 210.18(g)(1)(ii), the State agency would continue to be required to monitor counting and claiming at both the SFA and reviewed school levels. The review strategies would remain unchanged. Under the proposed rule, the State agency would continue to determine whether:
Daily lunch counts, by type, for the review period are more than the product of the number of children determined to be eligible, by type for the review period, adjusted for attendance at the reviewed schools;
Each type of food service line provides accurate point of service lunch counts, by type, and those lunch counts are correctly counted and recorded at the reviewed schools; and
All lunches at the reviewed schools are correctly counted, recorded, consolidated and reported for the day they are served.
In addition, State agencies would be required to determine whether lunch counts submitted by each school are correctly consolidated, recorded, and reported by the SFA on the Claim for Reimbursement.
Thus, the proposal combines the certification and benefit issuance process, and expands the scope of the certification and benefits issuance review to the SFA level, and establishes acceptable sample sizes and confidence levels for statistical sampling at proposed 7 CFR 210.18(g)(1)(i). The proposal retains existing meal counting and claiming review procedures at proposed 7 CFR 210.18(g)(1)(ii).
PS-2--Meal Pattern and Nutritional Quality
Under existing PS-2 found at 7 CFR 210.18(g)(2), the State agency monitors SFA compliance with the meal patterns and dietary specifications for lunches and breakfasts for each age/grade group. Currently, State agencies must review menu and production records for a minimum of five operating days to determine whether all food components and quantities have been offered. For the day of review, the State agency must also observe the serving line(s) to determine whether all food components and food quantities are offered, and observe a significant number of program meals counted at the point of service for each type of serving line to determine whether the meals selected by the students contain the required food components and quantities. In addition, the State agency must conduct a nutrient analysis of a school in the SFA to determine whether the meals offered meet the calorie, sodium and saturated fat requirements, and review nutrition labeling to assess compliance with the trans fat limit. The State agency must also assess whether performance-based cash assistance should continue to be provided for meals served.
The proposed rule at 7 CFR 210.18(g)(2) would largely retain the existing scope of review for PS-2 with the following modifications:
Require the State agency to complete a USDA-approved menu tool for each school selected for review to establish the SFA's compliance with the required food components and quantities for each age/grade group being served. The menu tool can be completed off-site (preferably) or on-site using production records, menus, recipes, food receipts, and any other documentation that shows the meals offered during a week from the review period contained the required components/
quantities.
Require the State agencies to review menu and production records for a minimum of three to a maximum of seven operating days to determine whether all food components and quantities have been offered over the course of a typical school week.
Require the State agency to confirm, through on-site observation of reviewed schools that students select at least three food components at lunch and at least three food items at breakfast when Offer versus Serve is in place, and that these meals include at least \1/2\ cup of fruits or vegetables.
Require the State agency to assess compliance with the dietary specifications (calories, sodium, saturated fat, and trans fat) using a risk-based approach and only require a weighted nutrient analysis for a school determined to be at high risk for violations (see discussion under the heading Dietary Assessment).
The State agency would continue to observe the meal service lines and review menu documentation on the day of review at review schools to determine whether all service lines offer all of the required food components and quantities. The State agency would also observe a significant number of program meals counted at the point of service for each type of serving line to determine whether the meals selected by the students contain the required food components and quantities.
Dietary Assessment
Existing 7 CFR 210.18(g)(2)(iv) requires a weighted nutrient analysis of the meals for students in age groups K and above to determine whether the meals offered meet the calorie, sodium, and saturated fat requirements set forth in 7 CFR 210.10 and 7 CFR 220.8. Under the proposed rule at 7 CFR 210.18(g)(2)(ii), the State agency would continue to assess whether the lunches and breakfasts offered to children are consistent with the calories, sodium, saturated fat, and trans fat restrictions. However, unlike the existing requirements, the proposed rule would require a risk-based approach to identify the reviewed school most at risk of nutrition-related violations and conduct a targeted menu review of that school.
Under the proposal, the State agency would complete the Meal Compliance Risk Assessment Tool off-site or on-site for each school selected for review to identify the school most at risk for nutrition-
related violations. This risk-based approach is intended to lessen the review burden on State agencies and allow them to better use their resources. For the one school determined to be most at risk, the State agency would conduct an in-depth, targeted menu review using one of four FNS approved options. For the targeted menu review, the State agency would have the following options: conduct a nutrient analysis, validate an existing nutrient analysis performed by the SFA or a contractor, complete the Dietary Specifications Assessment Tool to further examine the food service practices, or follow an alternative FNS-approved process utilizing the Menu Planning Tools for Certification for Six Cent Reimbursement. This proposed rule revises the existing nutrient analysis provisions found in 7 CFR 210.10(h) and 7 CFR 210.10(i) to reflect this new streamlined and risk-based approach.
Performance-Based Cash Assistance
As required in existing 7 CFR 210.18(g)(2)(v), the proposed rule at 7 CFR 210.18(g)(2)(iii) continues to require the State agency to assess whether performance-based cash assistance should continue to be provided for the meals served.
Follow-up Reviews
Under existing 7 CFR 210.18(i), critical area violations in excess of specified thresholds trigger a follow-up review by the State agency. This proposed rule lessens the burden
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associated with the administrative review by removing the existing requirement for follow-up reviews triggered by a specific threshold. The follow-up review requirement was implemented at a time when the review cycle was 5-years and there was concern about the long span between reviews. Because the 3-year review cycle now allows the State agency to have more frequent contact with the SFAs, the follow up requirement is unnecessary. Instead, the proposed review process emphasizes collaborative compliance. When errors are detected, the State agency would require corrective action, provide technical assistance to bring the SFA into compliance, and take fiscal action when appropriate. The State agency would have discretion to do a follow-up review based on criteria established by the State agency.
Accordingly, this proposed rule removes the definitions of ``follow-up reviews'' and ``review threshold'' in existing 7 CFR 210.18(b) and removes the follow-up review procedures in 7 CFR 210.18(i). Minor references to follow-up review and review threshold throughout 7 CFR part 210 are also removed. The definitions of ``large school food authority'' and ``small school food authority'' would be removed from 7 CFR 210.18(b), as these definitions were used in the determination of which SFAs received a follow-up review. The same definition of ``large school food authority'' would be added to 7 CFR part 235, State Administrative Expense Funds, where it remains relevant for the State Administrative Expense allocation process.
General Areas of Review
Under existing 7 CFR 210.18(h), State agencies are required to assess compliance with five general areas during the administrative review, i.e., free and reduced price process, civil rights, monitoring responsibilities, reporting and recordkeeping and food safety. Under the proposal at 7 CFR 210.18(h), the proposed rule expands the general areas of review to include existing and new requirements grouped into two broad categories: Resource Management and General Program Compliance.
Resource Management, found at proposed 7 CFR 210.18(h)(1), would focus on compliance with existing requirements that safeguard the overall financial health of the nonprofit school food service:
Maintenance of the Nonprofit School Food Service Account--
7 CFR 210.14(a), (b) and (c);
Paid Lunch Equity--7 CFR 210.14(e);
Revenue from Nonprogram Foods--7 CFR 210.14(f); and
Indirect Costs--2 CFR part 225, and 7 CFR 210.14(g) (as proposed).
Currently, SFAs are required to comply with these resource management requirements specified under existing 7 CFR 210.14; however, existing regulations do not require the State agencies to monitor compliance as part of the administrative review. Under this proposed rule at 7 CFR 210.18(h)(1), the State agency would monitor these five requirements using the Resource Management Risk Indicator Tool to identify SFAs at high risk for resource management problems, and would only conduct a comprehensive resource management review if, according to the tool, an SFA meets three or more of the following criteria:
Size of the SFA (40,000 students or more),
Financial findings on reviews or audits within the last three years,
Inadequate practices related to maintenance of the nonprofit school food service account,
Inadequate practices related to paid lunch equity,
Inadequate practices related to revenue from nonprogram foods, and/or
Inadequate practices related to indirect costs.
Adding Resource Management to the proposed administrative review would establish a framework for this review area, promote review consistency among all States, and promote proper stewardship of Federal funds. The required off-site review of Resource Management allows the reviewer to use the expertise of off-site State staff with specialized knowledge of resource management that may not typically be present during an on-site review. Under the proposal, State agencies continue to have flexibility to review Resource Management more frequently or more closely, provided the minimum areas of review are covered.
The Resource Management review area does not include procurement. Given the complexity of the procurement process, FNS will develop a separate review process for the State agencies to monitor compliance with procurement requirements. Excluding procurement from the proposed administrative review under 7 CFR 210.18 does not change the SFA's current responsibility to meet procurement standards applicable to those operating school meals programs. Pursuant to federal law and regulations at 2 CFR 200.318 through 2 CFR 200.326, SFAs continue to be required to fully comply with all attendant procurement standards and will be held accountable to those standards through regular State agency oversight.
It is also important to note that this proposed rule adds a new paragraph (g) to the Resource Management requirements in 7 CFR 210.14 to clarify the SFA's existing responsibilities with regard to indirect costs. This is discussed later in the preamble under the heading, ``IV. Proposed Changes to SFA Requirements.''
Proposed 7 CFR 210.18(h)(2), General Program Compliance would focus on the SFA compliance with the existing general areas found at 7 CFR 210.18(h)(1) through (h)(5): Free and reduced price process, civil rights, SFA on-site monitoring, reporting and recordkeeping, and food safety. In addition, the proposal expands the scope of review to include the requirements established by HHFKA for competitive food standards, water, and outreach for the SBP and Summer Food Service Program (SFSP). The proposed rule moves the existing oversight of outreach for SBP and SFSP from 7 CFR 210.19(g) to the new 210.18(h)(2)(viii) to reflect that this oversight activity is part of the general areas of review.
In total, the proposed general areas of review include, but are not limited to, the following areas:
Free and Reduced Price Process--including verification, notification, and other procedures--7 CFR part 245.
Civil Rights--7 CFR 210.23(b).
SFA On-site Monitoring--7 CFR 210.8(a)(1) and proposed 220.11(d).
Reporting and Recordkeeping--7 CFR parts 210, 220 and 245.
Food Safety--7 CFR 210.13.
Competitive Food Services--7 CFR 210.11 and 7 CFR 220.12.
Water--7 CFR 210.10(a)(1)(i) and 7 CFR 220.8(a)(1).
Professional Standards--7 CFR 210.30.
SBP and SFSP Outreach--7 CFR 210.12(d).
Local School Wellness Policies.
LEAs have been required to have local school wellness policies in place since 2006. Assessing compliance with this requirement has been a general area of review under the CRE, and is included in the Administrative Review Manual. The Department has issued a separate rulemaking to solicit public comment on the proposed implementation of HHFKA section 204, Local School Wellness Policy Implementation Under the Healthy, Hunger-Free Kids Act of 2010, 79 FR 10693 (2/26/14). A final rule is under development. Once a final rule is published, the administrative
Page 26852
review guidance will be updated to reflect the finalized requirements.
Finally, as noted later in the preamble, this proposed rule expands the existing requirement for SFAs to conduct on-site monitoring. This proposed change to 7 CFR 210.8 is discussed in more detail later under the heading ``IV. Proposed Changes to SFA Requirements.''
Other Federal Program Reviews
The review of other Federal programs is a new aspect of the proposed unified accountability system. It would ensure that State agencies monitor the NSLP's afterschool snack program and seamless summer option, the Special Milk Program, and the Fresh Fruit and Vegetable Program when these programs are administered by the SFA under review. Under the proposed rule at 7 CFR 210.18(g) and (h), the State agency would monitor the critical and/or general areas of review in the cited programs, as applicable.
In contrast, under existing 7 CFR 210.18(i)(4)(iv), a State agency is only required to monitor the certification, count and milk/meal service procedures for the Special Milk Program (7 CFR part 215) or the NSLP afterschool snack program (7 CFR part 210) during a follow-up review if the State agency has not evaluated these previously in the schools selected for an administrative review. However, including these programs in the regular, periodic review of SFA operations is critical to ensuring they are properly administered and is expected to improve program integrity overall.
Other Federal Program Reviews would help ensure that the SFA operates the other school meal programs in accordance with key regulatory requirements. The State agencies would be required to follow the proposed review approach (7 CFR 210.18), as applicable, to monitor the other school meal programs as prescribed in the FNS Administrative Review Manual. In most cases, under the proposed rule the review of other school meal programs would include the following:
NSLP afterschool snack program--The State agency would:
Use the Supplemental Afterschool Snack Program Administrative Review Form.
Review the school's eligibility for the afterschool snack program.
Ensure the school complies with counting and claiming procedures.
Confirm the school food authority conducts self-monitoring activities twice per year as required in 210.9(c)(7).
Assess compliance with the snack meal pattern in 7 CFR 210.10(o).
Monitor compliance with the reporting and recordkeeping, food safety and civil rights requirements in 7 CFR part 210.
NSLP seamless summer option--As proposed, the rule requires that the State agency, at a minimum:
Use the Supplemental Seamless Summer Option Administrative Review Form.
Verify the site eligibility for the seamless summer option.
Ensure the school food authority monitors the site(s) at least once per year.
Review meal counting and claiming procedures.
Monitor compliance with the meal patterns for lunches and breakfasts in 7 CFR 210.10 and 7 CFR 220.8, respectively.
Confirm the school food authority informs families of the availability of free meals.
Monitor compliance with the reporting and recordkeeping, food safety and civil rights requirements in 7 CFR part 210.
Special Milk Program (in NSLP schools)--As proposed, the rule requires that the State agency, at a minimum:
Use the Supplemental Special Milk Program Administrative Review Form.
Review the milk pricing policy, counting and claiming, and milk service procedures.
Observe the milk service at the reviewed site if there are issues with the meal counting and claiming procedures in the NSLP or SBP.
Ensure accuracy in certification and benefit issuance, when observing milk service.
Monitor compliance reporting and recordkeeping, food safety and civil rights requirements in 7 CFR part 215.
Fresh Fruit and Vegetable Program--As proposed, the rule requires that the State agency, at a minimum:
Confirm availability of benefits to all enrolled children free of charge.
Monitor allowable program costs, service time, outreach efforts, and types of fruits and vegetables offered.
Monitor compliance with the reporting and recordkeeping, food safety and civil rights requirements in 7 CFR part 210.
The Department has issued separate rulemaking, Fresh Fruit and Vegetable Program, 77 FR 10981 (February 24, 2012) to solicit public comment on the proposed Fresh Fruit and Vegetable Program. Currently, the program is operated under guidance that follows general requirements for program operations under 7 CFR part 210. The implementing administrative review rule will incorporate any citation changes that may be necessary if the Fresh Fruit and Vegetable Program rule is finalized in the location proposed at 7 CFR part 211.
Fiscal Action
Existing regulations at 7 CFR 210.19(c) require the State agency to identify the SFA's correct entitlement and take fiscal action when any SFA claims or receives more Federal funds than earned. Under this proposed rule at 7 CFR 210.18(l), State agencies would continue to be required to take fiscal action for all PS-1 violations and for specific PS-2 violations, as discussed next. This proposed rule expands the scope of fiscal action for certification/benefit issuance PS-1 violations, revises the method to calculate fiscal action for applicable violations, and modifies the State agency's authority to limit fiscal action for specific critical area violations when corrective action is completed.
Details about the proposed revisions to fiscal action follow.
PS-1 Violations
Under existing 7 CFR 210.18(m)(1), State agencies are required to take fiscal action for all certification, benefit issuance, meal counting, and claiming violations of PS-1 and fiscal action is generally limited to the reviewed schools. If corrective action occurs, the State agency may limit fiscal action from the point corrective action occurs back through the beginning of the review period.
For the Certification and Benefit Issuance portion of the new administrative review, 7 CFR 210.18(g) of this proposed rule would require State agencies to review certifications/benefit issuance for all the schools under its jurisdiction, not just reviewed schools. This broader scope of review is expected to provide the State agency with a more accurate picture of the SFA's practices at all participating schools under the jurisdiction of the SFA and lead to improved program integrity.
Given the broader scope of review at the SFA level, rather than the reviewed school level, this rule proposes several changes to the fiscal action procedures. The proposed rule at 7 CFR 210.18(l)(l) would apply fiscal action for certification and benefit issuance errors to the entire SFA, including non-reviewed schools. Expanding fiscal action across the entire SFA differs from the existing CRE review, and from the interim administrative review approach used by a number of State agencies operating under a waiver from CRE beginning and using the updated
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Administrative Review Guidance. Under CRE, fiscal action is generally limited to the reviewed schools because certification and benefit issuance monitoring is limited to the reviewed schools. Under the interim administrative review approach, State agencies monitor certification and benefit issuance for the entire SFA, but fiscal action is generally limited to the reviewed schools, consistent with the CRE regulatory requirements.
The proposed rule would revise fiscal action in the new administrative review process by basing fiscal action on a State-
calculated certification and benefit issuance adjustment factor for free and for reduced price meals, respectively. The adjustment factor for free meals is the ratio of the State agency count of students certified as eligible for free meals divided by the SFA count of students certified as eligible for free meals. The resulting percentage represents the benefit issuance accuracy rate for free meals. A similar calculation is made to obtain the reduced price adjustment factor. Under the proposed rule, the total number of free and reduced price meals claimed is adjusted to reflect the State-calculated certification and benefit issuance adjustment factors. This proposed approach differs from the CRE approach, which based fiscal action on the number of incorrect certifications in reviewed schools and the corresponding number of serving days. The proposed approach streamlines the determination of fiscal action and ensures program integrity SFA-wide.
The proposed rule amends 7 CFR 210.19(c) to indicate fiscal action applies to ``meals'', (rather than just lunches) and the Special Milk Program at 7 CFR part 215.
PS-2 Violations--Missing Food Component and Production Records
Under existing 7 CFR 210.18(m)(2)(i), State agencies are required to take fiscal action for food component violations of PS-2. However, if corrective action occurs, the State agency may limit fiscal action from the point corrective action occurs back through the beginning of the review period. Given the existing scope of review for PS-2, fiscal action is generally limited to the reviewed schools.
Under the proposed rule at 7 CFR 210.18(l)(2)(i), State agencies continue to be required to take fiscal action for PS-2 missing food component violations. Although fiscal action would generally be applied to the reviewed school, if a centralized menu is in place, the State agency should evaluate the cause(s) of the violation to determine if it is appropriate to apply fiscal action SFA wide.
In addition, the proposed rule requires the State agency to assess fiscal action on meals claimed for reimbursement that are not supported by appropriate documentation. An SFA is required to document that it offers reimbursable meals and maintain documentation that demonstrates how meals offered to students meet meal pattern requirements. If production records are missing, or missing for a certain time period, the proposed rule would require the State agency to take fiscal action unless the SFA is able to demonstrate to the satisfaction of the State agency, that reimbursable meals were offered and served.
Duration of Fiscal Action for PS-1 Violations and PS-2 Violations Related to Missing Food Component and Production Records
Under existing 7 CFR 210.19(c)(ii), fiscal action must be extended to the beginning of the school year or to that point during the current school year when the infraction first occurred, except as specified under existing 7 CFR 210.18(m). Based on the severity and longevity of the problem, the State agency may extend fiscal action back to previous school years, as applicable. The proposed rule retains the general duration, but in 7 CFR 210.18(l)(3), provides some flexibility for State agencies to limit the duration of fiscal action when corrective action takes place for PS-1 and PS-2 violations related to food components/missing production records. The proposal is as follows:
As proposed in 7 CFR 210.18(l)(3)(i), for PS-1 certification and benefit issuance errors, fiscal action would be required for the review period and the month of the on-site review, at a minimum. For example, if the review period is January and the month of the on-site review is February, then at a minimum fiscal action would be applied to the months of January and February. In scenarios where a month falls in between, i.e., January is the review period and March is when the on-
site review occurs, then fiscal action is applied to all three months.
For all other PS-1 violations and PS-2 violations relating to missing food components and missing production record:
If corrective action occurs during the on-site review month, the State agency must apply fiscal action from the point corrective action occurs back through the beginning of the on-site review month and for the review period. For example, if the review period is in January and the on-site review occurs in March and during the course of the review errors are identified and corrected on March 15th, then fiscal action would be applied from March 1st through March 14th and for the entire review period, i.e., January. If corrective action occurs during the review period, the State agency applies fiscal action from the point corrective action occurs back through the beginning of the review period. For example, if the review period is January and the on-site review occurs in March and it is determined that the problem was corrected on January15th, then fiscal action would be applied from January 1st through January 14th.
If corrective action occurs prior to the review period, no fiscal action is required under the proposal. In this scenario, any error identified and corrected prior to the review period, i.e., before January, it is not subject to fiscal action.
If corrective action occurs in a claim month(s) between the review period and the on-site review month, the State agency would apply fiscal action only to the review period. For example, if the review period is January and the on-site review occurs in March and the corrective action takes place in February, the state agency would be required to apply fiscal action only to the review period, i.e., January.
Based on the severity and longevity of the problem, the State agency would be able to extend fiscal action back to the beginning of the year or back to previous school years.
For PS-2 Violations Related to Vegetable Subgroups. Milk Type, Food Quantities, Whole Grain-Rich Foods, and Dietary Specifications
Existing 7 CFR 210.18(m)(2)(ii) requires fiscal action for repeated PS-2 violations related to vegetable subgroups and milk type. For repeated PS-2 violations related to food quantities, whole grain-rich foods and the dietary specifications, existing 7 CFR 210.18(m)(2)(iii) states that fiscal action is discretionary. The proposed rule would clarify the scope and duration of fiscal action for these repeated PS-2 violations. These changes are found at 7 CFR 210.18(l)(2)(ii) through (v) of the proposed rule.
For purposes of administrative reviews, repeated violations are generally those identified during the administrative review of an SFA in one cycle and identified again in the administrative review of the same SFA in the next review cycle. For example, if the State agency finds a PS-2 violation (e.g., unallowable milk type)
Page 26854
in an SFA in the first review cycle (SY 2013-2016), and finds the same problem during the second review cycle (SY 2016-2019), fiscal action would be required during the second review cycle.
It is important to note that while fiscal action is generally limited to the repeated violation found in a subsequent administrative review cycle, State agencies are required by existing 7 CFR 210.19(c) to take fiscal action for recurrent violations found in later visits to the SFA during the initial cycle (e.g., technical assistance visits, follow-up reviews) if these violations reflect willful and/or egregious disregard of program requirements. This would not occur during SY 2013-
2014 through SY 2015-2016, as FNS has indicated in guidance, including the memorandum, Administrative Reviews and Certification for Performance-Based Reimbursement in School Year (SY) 2014-2015 (SP-54 2014), and subsequent Question and Answer documents, that repeat findings will not result in fiscal action if they are repeated in the first 3-year review cycle. Beginning in SY 2016-2017, State agencies would be directed to contact FNS for guidance in these situations.
For repeated violations involving vegetable subgroups and/or milk requirements, existing regulations require the State agency to take fiscal action provided that technical assistance has been provided by the State agency, corrective action has been previously required and monitored by the State agency, and the SFA remains in non-compliance with PS-2. The proposed rule at 7 CFR 210.18(l)(2)(ii) would clarify the existing regulatory requirement to specify how a State must apply fiscal action. Under the proposal, any meals with an unallowable milk type or when there is no milk variety, would be required to be disallowed/reclaimed. If one vegetable subgroup is not offered over the course of the week reviewed, the State agency should evaluate the cause(s) of the error to determine the appropriate fiscal action required. When calculating the required fiscal action, the State agency would have discretion, as appropriate based on the cause and extent of the error, to disallow/reclaim all meals served in the deficient week.
For repeated violations of quantities and/or the whole grain-rich foods and dietary specifications, existing regulations allow State agency the discretion to apply fiscal action provided that technical assistance has been given by the State agency, corrective action has been previously required and monitored by the State agency, and the SFA remains in noncompliance with quantity, whole grain rich and dietary specifications. The proposal rule at 7 CFR 210.18(l)(2)(iii) clarifies the existing regulatory requirement and specifies how fiscal action must be applied.
For repeated violations involving food quantities and/or the whole grain-rich foods requirement, the State agency would continue to have discretion to apply fiscal action. When evaluating the cause(s) of the error to determine the extent of the discretionary fiscal action, the reviewer would consider the following:
If meals contain insufficient quantities of required food components, the affected meals may be disallowed/reclaimed.
If whole grain-rich foods are not offered over the course of the week reviewed, all meals served in the deficient week may be disallowed/reclaimed.
If insufficient whole grain-rich foods are offered, meals for one day during the week under review may be disallowed/reclaimed. The State agency has discretion to select which day's meals may be disallowed/reclaimed. Additional meals may be disallowed/reclaimed at State agency's discretion.
If a vegetable subgroup is offered in insufficient quantity to meet the minimum weekly requirement, meals may be disallowed/reclaimed for one day that week. The State agency has discretion to select which day's meals are disallowed/reclaimed. Additional meals may be disallowed/reclaimed at the State agency's discretion.
If the amount of fruit juice offered exceeds 50 percent of the total amount of fruits offered, or the amount of vegetable juice exceeds 50 percent of the total amount of vegetables offered, meals for the entire week may be disallowed/reclaimed.
For repeated violations of dietary specifications, the proposed rule in 7 CFR 210.18(l)(2)(iv) specifies that the State agency has discretion to take fiscal action and disallow/reclaim all meals for the entire week, if applicable, provided that technical assistance has been given by the State agency, corrective action has been previously required and monitored by the State agency, and the SFA remains noncompliant with the dietary specifications. If fiscal action is applied, it would be limited to the school selected for the targeted menu review. A nutrient analysis using USDA-approved software would be required to justify any fiscal action for noncompliance with the dietary specifications requirements.
The intent of these proposed fiscal action modifications and clarifications is to promote program integrity. Clearly identifying the critical area violations that may result in fiscal action and the scope and duration of any fiscal action, will promote consistency in fiscal action procedures among State agencies.
The administrative review manual also includes automated forms and tools designed to simplify the fiscal action process for State agencies. Fiscal action, whether required or at the States discretion, would be applied in a consistent manner and would take significantly less time to complete.
FNS is especially interested in soliciting feedback from early adopters of the new administrative review process on the impact of the proposed fiscal action method. We acknowledge that expanding the scope of review to include the SBP and strengthening fiscal action for PS-1 and PS-2 violations may result in increased fiscal action against certain SFAs.
Transparency Requirement
Section 207 of the HHFKA amended section 22 of the NSLA (42 U.S.C. 1769c) to require State agencies to report the final results of the administrative review to the public in the State in an accessible, easily understood manner in accordance with guidelines promulgated by the Secretary.
This proposed rule at 7 CFR 210.18(m) requires the State agency to post a summary of the most recent final administrative review results for each SFA on the State agency's publicly available Web site. The review summary must cover eligibility and certification review results, an SFA's compliance with the meal patterns and the nutritional quality of school meals, the results of the review of the school nutrition environment (including food safety, local school wellness policy, and competitive foods), and compliance related to civil rights, and general program participation, in a format prescribed by FNS. At a minimum, this would include the written notification of review findings provided to the SFAs Superintendent as required at 7 CFR 210.18.(i)(3). FNS will provide additional guidance on the appropriate format, including templates and model summaries, after the implementing rule is published.
State agencies would be required to post this review summary no later than 30 days after the State agency provides the final results of the administrative review to the SFA. The State agency would also be required to make a copy of the final administrative review report
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available to the public upon request. This requirement seeks to promote transparency and accountability in program operations as parents and stakeholders are increasingly aware of the potential benefits of the programs and seek more information about them.
Reporting and Recordkeeping
Current regulations in 7 CFR 210.18(n) and (o) address the State agency reporting requirements associated with the administrative review process. This proposed rule would retain the requirement to file the form FNS-640 at proposed 7 CFR 210.18(n), but would remove reference to follow-up reviews. The proposal retains the basic record keeping requirement at 210.18(o), but removes the reporting requirement associated with follow-up reviews found in existing 7 CFR 210.18(o) and 7 CFR 210.20(a)(5) due to the proposed elimination of the follow-up reviews. The recordkeeping associated with follow-up reviews in 7 CFR 210.18(p) and 7 CFR 210.20(b)(7) would also be eliminated.
The proposed removal of the follow-up review is expected to reduce the reporting and recordkeeping burden on State agencies. As discussed earlier, the information collection associated with the updated forms and new tools required for the administrative review process will be addressed separately in a 60-day notice, when the implementing rule is published.
-
Proposed Changes to SFA Requirements
As stated earlier, this proposed rule would add a new paragraph (g) in 7 CFR 210.14, Resource Management, to clarify SFA responsibilities regarding indirect costs that will be monitored by the State agency during the administrative review. The additional regulatory language would not represent a new requirement for SFAs. The proposed paragraph (g) would reflect existing requirements in 2 CFR part 225 that are applicable to the operators of the school meal programs. The intent of the proposed paragraph (g) is to highlight an SFA responsibility that often goes unnoticed because it is not clearly stated in 7 CFR 210.14.
To improve overall monitoring of the school meal programs, this proposed rule would also expand the SFA on-site monitoring process. Under existing 7 CFR 210.8(a)(1), SFAs with more than one school are required to perform no less than one on-site review of the lunch counting and claiming system employed by each school under its jurisdiction. The SFA must conduct the required on-site review prior to February 1 of each school year. The proposed rule at 7 CFR 210.8(a)(1) would expand the scope of on-site monitoring to include the readily observable general areas of review cited under 7 CFR 210.18(h), as identified by FNS. Readily observable areas of review could include, but are not limited to, the availability of free potable water, proper food safety practices, and compliance with Civil Rights requirements.
In addition, the SFA monitoring activities would extend to the SBP. The SFA would be required to annually monitor the operation of the NSLP and SBP at each school under its jurisdiction. As is currently done with the NSLP, this monitoring of the SBP would include the counting and claiming system used by a school and the general areas of review that are readily observable. This expansion of the SFA monitoring activities is intended to ensure that SFAs self-monitor and are aware of operational issues, and that schools receive ongoing guidance and technical assistance to facilitate compliance with program requirements.
-
Comparison of Existing and Proposed Administrative Review Requirements
The following chart summarizes the key existing and proposed administrative review requirements and states the anticipated outcomes.
------------------------------------------------------------------------
Existing requirement Proposed rule Effect of proposal
------------------------------------------------------------------------
Review location--State Review location--The The proposal is
agencies are required to proposal would expected to provide
conduct an on-site review allow portions of State agencies with
of each SFA once every 3- the review to be review flexibility,
years. conducted off-site lower travel costs,
and on-site. No and increase their
change to the 3- ability to use in-
year cycle. house/off-site
staff expertise to
review complex
documentation.
Scope of review--The scope Scope of review--The The proposal would
of review covers both proposal retains establish the
critical and general areas the focus on unified review
for the NSLP and SBP. The critical and system envisioned
critical areas, PS-1 and PS- general areas of by the HHFKA. While
2, assess whether meals review, but would the proposal would
claimed for reimbursement expand the general expand the scope of
are served to children areas of review for review by adding
eligible for free, reduced a more robust new general areas
price, and paid meals; are monitoring process. and Other Federal
counted, recorded and New general areas Program reviews, it
consolidated, and reported would include: would also provide
through a system that Resource efficiencies
consistently yields correct Management, resulting from off-
claims; and meet meal Competitive Food site monitoring,
pattern requirements. Services, Water and risk assessment
The general areas assess SBP and SFSP protocols, and
whether the SFA met other Outreach. In automated forms.
program requirements addition, the Overall, the
related to free and reduced proposal would add proposal is
price process, civil Other Federal expected to reduce
rights, SFA monitoring, Program reviews and the review burden
food safety, and reporting would introduce on State agencies
and recordkeeping. risk assessment and increase
protocols to target program integrity.
at risk schools/
districts.
Eligibility certification-- Eligibility The proposal is
State agencies review the certification--The expected to improve
free and reduced price proposal would program integrity
certifications for children require State across the SFA. No
in schools selected for agencies to review change in burden is
review. the free and expected since the
reduced price State agency has
certifications made the option to
by the local review a
educational agency statistically valid
in all schools in sample of
the district or a applications.
statistically valid
sample of those
certifications.
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Fiscal action--Fiscal action Fiscal action-- The proposal is
for certification and Fiscal action for expected to promote
benefit issuance violations certification and consistency and
is calculated based on benefit issuance accuracy in fiscal
errors in the reviewed violations would action procedures
schools. apply to the entire used by State
SFA, including non- agencies
reviewed schools nationwide.
and would be
determined in a
manner prescribed
by FNS. The
proposal would also
prescribe the
extent of fiscal
action for repeated
PS-2 violations. If
corrective action
takes place, the
duration of fiscal
action for PS-1 and
specific PS-2
violations could
also be revised.
Meal pattern and dietary Meal pattern and Requiring a weighted
specifications--State dietary nutrient analysis
agencies must review the specifications--The only for a school
meal service for the day of State agencies determined to be at
review and menu and would continue to highest risk for
production records for a review the meal dietary
minimum period of 5 days. service for the day specification
State agencies must conduct of review, and violations makes
a weighted nutrient menus and the best use of
analysis for each reviewed production records limited State
school. for 3-7 days. If agency resources.
the review reveals This change is
problems with expected to improve
components or program integrity
quantities, the by focusing time
State agency would and effort on at
expand the review risk schools.
to, at a minimum,
the entire review
period.
This proposed rule
would require the
State agencies to
conduct a meal
compliance risk
assessment for all
schools under
review to identify
the school at
highest risk for
nutrition-related
violations, and to
conduct a targeted
menu review for
that single school.
If the targeted
menu review
confirms the school
is at high risk for
dietary
specification
violations, a
weighted nutrient
analysis for that
school would be
required.
Follow-up reviews--State Follow-up reviews-- The proposed rule
agencies are required to The proposal would recognizes that
determine whether an SFA eliminate the State agencies will
has violations in excess of required follow-up be conducting
specified thresholds and, reviews and reviews on a more
if so, conduct follow-up corresponding frequent basis. It
reviews within specified review thresholds. provides States
timeframes. Follow-up reviews with the
would be at the flexibility to
State agency's conduct follow-up
discretion. review activity at
their discretion.
Reporting and recordkeeping-- Reporting and The proposal would
State agencies are required recordkeeping--The reduce reporting
to notify FNS of the names proposal would burden for State
of large SFAs in need of a eliminate the agencies.
follow-up review. State follow-up review
agencies are required to reporting and
maintain records regarding recordkeeping
its criteria for selecting requirements.
schools for follow-up
reviews.
Posting of final review Posting of final Posting this
results--No existing review results--The information online
requirements. proposal would is expected to
require State enhance awareness
agencies to make of school and SFA
the final results performance at
of each SFA meeting the
administrative requirements of the
review available to school meal
the public in an programs and
accessible, easily increase informed
understood manner involvement of
in accordance with parents in the
guidelines program. The
established by the increased reporting
Secretary; such burden associated
results must also with the posting is
be posted and expected to be
otherwise made minor.
available to the
public on request.
Include other Federal school Include other The proposal would
nutrition programs in a Federal school foster integrity of
follow up review--If the nutrition programs all school meal
State agency did not in the programs, and
evaluate the certification, administrative promote efficiency.
count and milk/meal service review--The
procedures for the SMP or proposal would
afterschool care programs require State
in the schools selected for agencies to review
an administrative review, the NSLP
it must do so during the afterschool snacks,
follow-up review. the NSLP seamless
summer option, the
SMP, and the FFVP
as part of the
administrative
review under 7 CFR
210.18.
------------------------------------------------------------------------
Comparison of Existing and Proposed SFA Requirements
The following chart summarizes SFA requirements associated with the administrative review process.
------------------------------------------------------------------------
Existing requirement Proposed rule Effect of proposal
------------------------------------------------------------------------
Resource Management--7 CFR Resource Management-- The proposal would
210.8 does not address This proposal would increase
indirect costs explicitly. add text in 7 CFR understanding of
210.14 to clarify indirect cost
the SFA's existing responsibilities
responsibilities that are monitored
with regard to by the State agency
indirect costs. under the proposed
administrative
review.
Page 26857
SFA monitoring--SFAs are SFA monitoring--The The proposal would
required to monitor the proposal would result in a more
lunch counting and claiming require the SFA to robust and
processes schools annually. also monitor the effective SFA
SBP and to expand monitoring process,
the annual school which would
review by including contribute to the
selected general integrity of the
areas of review school meal
that are readily programs.
observable.
------------------------------------------------------------------------
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Miscellaneous Changes
As previously mentioned, this rule proposes a number of miscellaneous changes to conform with other changes in the programs. Accordingly, the proposal would:
Delete obsolete provision at 7 CFR 210.7(d)(1)(vi) related to validation reviews of performance-based reimbursement;
Revise 7 CFR 210.9(b)(18) through 210.9(b)(20) and 210.15(b)(4) to reflect the diversity of certification mechanisms beyond household applications;
Revise 7 CFR 210.19(a)(1) to reflect the Paid Lunch Equity requirements;
Revise 7 CFR 210.19(a)(5) to update the review frequency to 3 years conforming with the requirement at 210.18(c); and
Delete obsolete provisions at 7 CFR 210.20(b)(7) and 210.23(d).
-
Procedural Matters
-
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
This proposed rule has been reviewed by the Office of Management and Budget (OMB) in conformance with Executive Order 12866 and has been determined to be Not Significant.
-
Regulatory Impact Analysis
This proposed rule has been designated by the Office of Management and Budget (OMB) to be Not Significant; therefore a Regulatory Impact Analysis is not required.
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Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies to analyze the impact of rulemaking on small entities and consider alternatives that would minimize any significant impacts on a substantial number of small entities. Pursuant to that review it has been certified that this proposed rule would not have a significant impact on a substantial number of small entities. This proposed rule would update the administrative review process that State agencies must follow to monitor compliance with school meal programs' requirements. The proposed administrative review process provides State agencies more flexibility, tools and streamlined procedures. FNS does not expect that the proposed rule will have a significant economic impact on small entities.
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Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with ``Federal mandates'' that may result in expenditures by State, local or tribal governments, in the aggregate, or the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, Section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.
This proposed rule does not contain Federal mandates (under the regulatory provisions of Title II of the UMRA) that would result in expenditures for State, local and tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.
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Executive Order 12372
The nutrition assistance programs and areas affected by this proposed rule are listed in the Catalog of Federal Domestic Assistance as follows:
National School Lunch Program, No. 10.555
School Breakfast Program, No. 10.553
Special Milk Program, No. 10.556
State Administrative Expenses for Child Nutrition, No. 10.560
Fresh Fruit and Vegetable Program, No. 10.582
For the reasons set forth in the final rule in 7 CFR part 3015, subpart V, and related notice (48 FR 29115, June 24, 1983), the nutrition assistance programs are included in the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials. The Child Nutrition Programs are federally funded programs administered at the State level. FNS headquarters and regional office staff engage in ongoing formal and informal discussions with State and local officials regarding program operational issues. The structure of the Child Nutrition Programs allows State and local agencies to provide feedback that contributes to the development of meaningful and feasible program requirements. This proposed rule has taken into account the extensive experience of State agencies conducting the administrative reviews which would be updated by this rule.
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Executive Order 13132
Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section (6)(b)(2)(B) of Executive Order 13121.
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Prior Consultation With State Officials
FNS headquarters and regional offices have formal and informal discussions with State agency officials on an ongoing basis regarding the Child Nutrition Programs and policy issues. In addition, prior to drafting this proposed rule, FNS assembled a 26-member team consisting of staff from FNS Headquarters and the seven Regional Offices, and State Agency staff from Kansas, Michigan, New York, North Carolina, Oregon, Pennsylvania and Texas. The School Meal Administrative Review Reinvention Team (SMARRT) worked together for a year to address
Page 26858
issues and develop an updated review process that is responsive to the needs, wants, and challenges of the State agencies.
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Nature of Concerns and the Need To Issue This Rule.
The Healthy, Hunger-Free Kids Act of 2010 (HHFKA) amended section 22 of the Richard B. Russell National School Lunch Act (NSLA), 42 U.S.C. 1769c, to require that:
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The administrative review process be a unified accountability system; and
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State agencies report the final results of reviews, and post them or otherwise make them available to the public.
This proposed rule would update the administrative review process established in 7 CFR 210.18 to carry out these two statutory requirements. In addition, the proposed rule would also make a number of changes to address issues and concerns raised by State agencies. Issues identified by State agencies include simplifying the administrative review and fiscal action. State agencies also want the administrative reviews to be meaningful and contribute to better meal service. They also want a review process that would allow them to better utilize the limited resources they have.
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Extent to Which the Department Meets Those Concerns
FNS has considered the concerns identified by SMARRT. The administrative review process proposed in this rule would streamline review procedures to allow more time for technical assistance, emphasize risk-assessment to enable the State agency to focus the administrative review on school food authorities at high risk for noncompliance, and provide State agencies flexibility to conduct portions of the review off-site to make better use of limited resources.
-
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Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect unless so specified in the Effective Dates section of the final rule. Prior to any judicial challenge to the provisions of the final rule, appeal procedures in 7 CFR 210.18(q) and 7 CFR 235.11(f) of this chapter must be exhausted.
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Executive Order 13175
Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the federal government and Indian Tribes. In spring 2011, FNS offered five opportunities for consultation with Tribal officials or their designees to discuss the impact of the Healthy, Hunger-Free Kids Act of 2010 on tribes or Indian Tribal governments. FNS followed up with conference calls on February 13, 2013; May 22, 2013; August 21, 2013 and November 6, 2013. These consultation sessions provide the opportunity to address Tribal concerns related to the School Meals Programs. To date, Indian Tribal governments have not expressed concerns about the required unified accountability system during these consultations.
USDA is unaware of any current Tribal laws that could be in conflict with the proposed rule. The Department will respond in a timely and meaningful manner to all Tribal government requests for consultation concerning this rule.
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Civil Rights Impact Analysis
FNS has reviewed this proposed rule in accordance with Department Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify any major civil rights impacts the rule might have on children on the basis of age, race, color, national origin, sex, or disability. A careful review of the rule's intent and provisions revealed that this proposed rule is not intended to reduce a child's ability to participate in the National School Lunch Program, School Breakfast Program, Fresh Fruit and Vegetable Program, or Special Milk Program.
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Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR part 1320) requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current, valid OMB control number. This is a revision of currently approved collection. The administrative reviews in School Nutrition Program provisions in this rule minimally increase burden hours for the National School Lunch Program (NSLP) information collection, OMB Control Number #0584-0006, expiration date 2/29/2016. These changes are contingent upon OMB approval under the Paperwork Reduction Act of 1995. When the information collection requirements have been approved, FNS will publish a separate action in the Federal Register announcing OMB's approval. Additionally, the forms and tools associated with the proposed administrative review process will be addressed separately in a 60-day notice.
Written comments on the information collection in this proposed rule must be received by July 10, 2015.
Send comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Please also send a copy of your comments to Lynn Rodgers-Kuperman, Child Nutrition Monitoring and Operations Support Division, 3101 Park Center Drive, Alexandria, VA 22302. For further information, or for copies of the information collection requirements, please contact Lynn Rodgers-
Kuperman at the address indicated above. Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the Agency's functions, including whether the information will have practical utility; (2) the accuracy of the Agency's estimate of the proposed information collection burden, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All responses to this request for comments will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Title: 7 CFR part 210, National School Lunch Program: Proposed Rule for Administrative Reviews in the School Nutrition Programs.
OMB Number: 0584-0006.
Expiration Date: 02/29/2016.
Type of Request: Revision of currently approved collection.
Abstract: This proposed rule would revise the NSLP administrative review requirements to establish a unified
Page 26859
accountability system designed to ensure that participating school food authorities (SFA) comply with the NSLP and School Breakfast Program requirements, as required by the Healthy, Hunger-Free Kids Act of 2010. In addition to the new administrative review process, this rule proposes to require State agencies to report and publicly post SFAs administrative review results. The proposed rule would eliminate the existing requirement for State agencies to report the names of those large SFAs subject to a follow-up reviews and hence reduces associated reporting burden. These proposed changes are expected to give State agencies more flexibility to conduct reviews, allow for the efficient use of limited time and staff, and result in a more robust and effective monitoring of the School Nutrition Programs.
This proposed rule slightly increased the number of burden hours for 0584-0006 collection. The current collection burden inventory for the NSLP is 10,223,035. This proposed rule will decrease reporting burden by 11.2 hours, increase public disclosure burden by 1,736 hours and increase recordkeeping burden by 14 hours for an overall increase of 1,739 hours as a result of program changes. The revised total burden inventory for the NSLP with this proposed rule is 10,224,774 hours. The average burden per response and the annual burden hours are explained below and summarized in the charts which follow.
Respondents for this Proposed Rule: State Education Agencies: 56.
Estimated Number of Responses per Respondent for this Proposed Rule: 124.
Estimated Total Annual Responses: 6944.
Average hours per Response: 0.25.
Estimated Total Annual Burden on Respondents for this Proposed Rule: 1739.
Estimated Annual Burden for (0584-0006) Administrative Reviews in the School Nutrition Programs Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Average
Section number of Frequency of Total annual burden per Annual burden
respondents response responses response hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting
--------------------------------------------------------------------------------------------------------------------------------------------------------
* SAs will report to FNS about names of 210.18(i), 210.18(d)(2), 56 1 56 0.20 (11.20)
large SFAs exceeding any one of the CRE 210.18(o)(1)
critical area review thresholds..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Public Disclosure
--------------------------------------------------------------------------------------------------------------------------------------------------------
Establish a state agency requirement to 210.18(m)(1) 56 124 6944 0.25 1736
post a summary of the most recent
administrative review results of each SFA
-------------------------------------------------------------------------------------------------------------
Total Reporting for Proposed rule..... ............................ 56 125 7000 0.2464 1725
-------------------------------------------------------------------------------------------------------------
Total Existing Reporting Burden for ............................ .............. .............. .............. .............. 1,003,770
0584-0006, Part 210..................
-------------------------------------------------------------------------------------------------------------
Total Revised Reporting Burden for ............................ .............. .............. .............. .............. 1,005,495
Part 210 with Administrative review
proposed rule........................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number Respondents.......... ............................ 56 .............. .............. .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping
--------------------------------------------------------------------------------------------------------------------------------------------------------
SAs must maintain a copy of the summary of 210.18(o) 56 1 56 0.25 14
the most recent administrative review
results of each SFA......................
-------------------------------------------------------------------------------------------------------------
Total Recordkeeping for Proposed rule. ............................ 56 1 56 0.25 14
-------------------------------------------------------------------------------------------------------------
Page 26860
Total Existing Recordkeeping Burden ............................ .............. .............. .............. .............. 9,219,264
for 0584-0006, Part 210..............
-------------------------------------------------------------------------------------------------------------
Total Revised Recordkeeping Burden for ............................ .............. .............. .............. .............. 9,219,278
Part 210 with Administrative review
proposed rule........................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Number Responses per ............................ .............. .............. .............. .............. 124
Respondent...........................
Total Annual Responses................ ............................ .............. .............. .............. .............. 6,944
Average Hours per response............ ............................ .............. .............. .............. .............. 0.25
Total Burden Hours for Part 210 with ............................ .............. .............. .............. .............. 10,224,774
Proposed Rule........................
Current OMB Inventory for Part 210.... ............................ .............. .............. .............. .............. 10,223,035
Difference (New Burden Requested With ............................ .............. .............. .............. .............. 1,739
Proposed Rule).......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This proposed rule would eliminate the required follow-up reviews and corresponding review thresholds. Therefore, the burden assessment (11.20 hours)
associated with 7 CFR 210.18(i) will be removed from the NSLP, OMB Control Number #0584-0006, expiration date 2/29/2016.
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E-Government Act Compliance
FNS is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services and for other purposes.
List of Subjects
7 CFR Part 210
Grant programs--education; Grant programs--health; Infants and children; Nutrition; Reporting and recordkeeping requirements; School breakfast and lunch programs; Surplus agricultural commodities.
7 CFR Part 215
Food assistance programs, Grant programs--education, Grant programs--health, Infants and children, Milk, Reporting and recordkeeping requirements.
7 CFR Part 220
Grant programs--education; Grant programs--health; Infants and children; Nutrition; Reporting and recordkeeping requirements; School breakfast and lunch programs.
7 CFR Part 235
Administrative practice and procedure; Food assistance programs; Grant programs--education; Grant programs--health; Infants and children; Reporting and recordkeeping requirements; School breakfast and lunch programs.
Accordingly, 7 CFR parts 210, 215, 220 and 235 are proposed to be amended as follows:
PART 210--NATIONAL SCHOOL LUNCH PROGRAM
0
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The authority citation for 7 CFR part 210 continues to read as follows:
Authority: 42 U.S.C. 1751-1760, 1779.
0
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In part 210, remove the word ``SF-269'' wherever it appears and add, in its place, the word ``FNS-777''.
Sec. 210.7 Amended
0
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In Sec. 210.7, remove paragraph (d)(1)(vii) and redesignate paragraph (d)(1)(viii) as paragraph (d)(1)(vii).
Sec. 210.8 Amended
0
-
In Sec. 210.8:
0
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In the first sentence of paragraph (a)(1), remove the word ``lunch''.
0
-
In the first sentence of paragraph (a)(1), remove the words ``employed by'' and add in their place the words ``and the readily observable general areas of review cited under Sec. 210.18(h), as prescribed by FNS for''.
0
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In the third sentence of paragraph (a)(1), add the words ``or general review areas'' after the word ``procedures''.
0
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In the fourth sentence, remove the word ``lunches'' and add in its place the word ``meals''; and
0
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In paragraph (a)(3)(ii), remove the word ``subsequent''.
0
-
-
In Sec. 210.9:
0
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In paragraph (b)(18), remove the words ``applications which must be readily retrievable by school'' and add in their place the words ``certification documentation'';
0
-
Revise the introductory text of paragraph (b)(19); and
0
-
Revise paragraph (b)(20).
The revisions read as follows:
Sec. 210.9 Agreement with State agency.
* * * * *
(b) * * *
(19) Maintain direct certification documentation obtained directly from the appropriate State or local agency, or
Page 26861
other appropriate individual, as specified by FNS, indicating that:
* * * * *
(20) Retain eligibility documentation submitted by families for a period of 3 years after the end of the fiscal year to which they pertain or as otherwise specified under paragraph (b)(17) of this section.
* * * * *
0
-
-
In Sec. 210.10:
0
-
In paragraph (h), revise the heading;
0
-
In paragraph (h)(1), revise the first sentence;
0
-
In paragraph (i), revise the heading and revise paragraph (i)(1);
0
-
Revise paragraph (i)(3)(i);
0
-
In paragraph (j), revise the paragraph heading; and
0
-
In paragraph (o), add paragraph (o)(5).
The revisions and additions read as follows:
Sec. 210.10 Meal requirements for lunches and requirements for afterschool snacks.
* * * * *
(h) Monitoring dietary specifications.
(1) * * * When required by the administrative review process set forth in Sec. 210.18, the State agency must conduct a weighted nutrient analysis to evaluate the average levels of calories, saturated fat, and sodium of the lunches offered to students in grades K and above during one week of the review period. * * *
* * * * *
(i) Nutrient analyses of school meals--(1) Conducting the nutrient analysis. Any nutrient analysis, whether conducted by the State agency under Sec. 210.18 or by the school food authority, must be performed in accordance with the procedures established in paragraph (i)(3) of this section. The purpose of the nutrient analysis is to determine the average levels of calories, saturated fat, and sodium in the meals offered to each age grade group over a school week. The weighted nutrient analysis must be performed as required by FNS guidance.
* * * * *
(3) * * *
(i) Weighted averages. The nutrient analysis must include all foods offered as part of the reimbursable meals during one week within the review period. Foods items are included based on the portion sizes and serving amounts. They are also weighted based on their proportionate contribution to the meals offered. This means that food items offered more frequently are weighted more heavily than those not offered as frequently. The weighted nutrient analysis must be performed as required by FNS guidance.
* * * * *
(j) Responsibility for monitoring meal requirements. * * *
* * * * *
(o) * * *
(5) Monitoring afterschool snacks. Compliance with the requirements of this paragraph is monitored by the State agency as part of the administrative review conducted under Sec. 210.18. If the snacks offered do not meet the requirements of this paragraph, the State agency or school food authority must provide technical assistance and require corrective action. In addition, the State agency must take fiscal action, as authorized in Sec. Sec. 210.18(l) and 210.19(c).
* * * * *
0
-
-
In Sec. 210.14:
0
-
Add a sentence at the end at the paragraph (d); and
0
-
Add paragraph (g).
The additions read as follows:
Sec. 210.14 Resource management.
* * * * *
(d) * * * The school food authority's policies, procedures, and records must account for the receipt, full value, proper storage and use of donated foods.
* * * * *
(g) Indirect costs. School food authorities must follow fair and consistent methodologies to identify and allocate allowable indirect costs to the school food service account, as required in 2 CFR part 225.
Sec. 210.15 Amended
0
-
-
In Sec. 210.15(b)(4), remove the words ``applications for'' and add in their place the words ``certification documentation for''.
0
-
Revise Sec. 210.18 to read as follows:
Sec. 210.18 Administrative reviews.
(a) Programs covered and methodology. Each State agency must follow the requirements of this section to conduct administrative reviews of school food authorities participating in the National School Lunch Program and the School Breakfast Program (part 220 of this chapter). These procedures must also be followed, as applicable, to conduct administrative reviews of the National School Lunch Program, afterschool snack program and seamless summer option, the Special Milk Program (part 215 of this chapter), and the Fresh Fruit and Vegetable Program. To conduct a program review, the State agency must gather and assess information off-site and/or on-site, observe the school food service operation, and use a risk-based approach to evaluate compliance with specific program requirements.
(b) Definitions. The following definitions are provided in alphabetical order in order to clarify State agency administrative review requirements:
Administrative reviews means the comprehensive off-site and/or on-
site evaluation of all school food authorities participating in the programs specified in paragraph (a) of this section. The term ``administrative review'' is used to reflect a review of both critical and general areas in accordance with paragraphs (g) and (h) of this section, as applicable for each reviewed program, and includes other areas of program operations determined by the State agency to be important to program performance.
Critical areas means the following two performance standards described in detail in paragraph (g) of this section:
(1) Performance Standard 1--All free, reduced price and paid school meals claimed for reimbursement are served only to children eligible for free, reduced price and paid school meals, respectively; and are counted, recorded, consolidated and reported through a system which consistently yields correct claims.
(2) Performance Standard 2--Reimbursable lunches meet the meal requirements in Sec. 210.10, as applicable to the age/grade group reviewed. Reimbursable breakfasts meet the meal requirements in Sec. 220.8 of this chapter, as applicable to the age/grade group reviewed.
Day of review means the day(s) on which the on-site review of the individual sites selected for review occurs.
Documented corrective action means written notification required of the school food authority to certify that the corrective action required for each violation has been completed and to notify the State agency of the dates of completion. Documented corrective action may be provided at the time of the review or may be submitted to the State agency within specified timeframes.
General areas means the areas of review specified in paragraph (h) of this section. These areas include free and reduced price process, civil rights, school food authority on-site monitoring, reporting and recordkeeping, food safety, competitive food services, water, program outreach, resource management, and other areas identified by FNS.
Participation factor means the percentages of children approved by the school for free lunches, reduced price lunches, and paid lunches, respectively, who are participating in the Program. The free participation factor is derived by dividing the number of free lunches claimed for any given period by the
Page 26862
product of the number of children approved for free lunches for the same period times the operating days in that period. A similar computation is used to determine the reduced price and paid participation factors. The number of children approved for paid lunches is derived by subtracting the number of children approved for free and reduced price lunches for any given period from the total number of children enrolled in the reviewed school for the same period of time, if available. If such enrollment figures are not available, the most recent total number of children enrolled must be used. If school food authority participation factors are unavailable or unreliable, State-
wide data must be employed.
Review period means the most recent month for which a Claim for Reimbursement was submitted, provided that it covers at least ten (10) operating days.
(c) Timing of reviews. State agencies must conduct administrative reviews of all school food authorities participating in the National School Lunch Program (including the afterschool snack program and the seamless summer option) and School Breakfast Program at least once during a 3-year review cycle, provided that each school food authority is reviewed at least once every 4 years. For each State agency, the first 3-year review cycle started the school year that began on July 1, 2013, and ended on June 30, 2014. The administrative review must be completed during the school year in which the review was begun.
(1) Review cycle exceptions. FNS may, on an individual school food authority basis, approve written requests for 1-year extensions to the 3-year review cycle specified in paragraph (c) of this section if FNS determines this 3-year cycle requirement conflicts with efficient State agency management of the programs.
(2) Follow-up reviews. The State agency may conduct follow-up reviews in school food authorities where significant and/or repeated critical or general violations exist. The State agency may conduct follow-up reviews in the same school year as the administrative review.
(d) Scheduling school food authorities. The State agency must use its own criteria to schedule school food authorities for administrative reviews; provided that the requirements of paragraph (c) of this section are met. State agencies may take into consideration the findings of the claims review process required under Sec. 210.8(b)(2) in the selection of school food authorities.
(1) Schedule of reviews. To ensure no unintended overlap occurs, the State agency must inform FNS of the anticipated schedule of school food authority reviews upon request.
(2) Exceptions. In any school year in which FNS or the Office of the Inspector General (OIG) conducts a review or investigation of a school food authority in accordance with Sec. 210.19(a)(5), the State agency must, unless otherwise authorized by FNS, delay conduct of a scheduled administrative review until the following school year. The State agency must document any exception authorized under this paragraph.
(e) Number of schools to review. At a minimum, the State agency must review the number of schools specified in paragraph (e)(1) of this section and must select the schools to be reviewed on the basis of the school selection criteria specified in paragraph (e)(2) of this section. The State agency may review all schools meeting the school selection criteria specified in paragraph (e)(2) of this section.
(1) Minimum number of schools. Except for residential child care institutions, the State agency must review all schools with a free average daily participation of 100 or more and a free participation factor of 100 percent or more. In no event must the State agency review less than the minimum number of schools illustrated in Table A for the National School Lunch Program.
Table A
------------------------------------------------------------------------
Minimum
number of
Number of schools in the school food authority schools to
review
------------------------------------------------------------------------
1 to 5.................................................. 1
6 to 10................................................. 2
11 to 20................................................ 3
21 to 40................................................ 4
41 to 60................................................ 6
61 to 80................................................ 8
81 to 100............................................... 10
101 or more............................................. * 12
------------------------------------------------------------------------
* Twelve plus 5 percent of the number of schools over 100. Fractions
must be rounded up (>=0.5) or down (=0.5) or down (
-
-
