Streamlining Program Requirements and Improving Integrity in the Summer Food Service Program (SFSP)
| Published date | 23 January 2020 |
| Citation | 85 FR 4064 |
| Record Number | 2020-00919 |
| Section | Proposed rules |
| Court | Food And Nutrition Service |
Federal Register, Volume 85 Issue 15 (Thursday, January 23, 2020)
[Federal Register Volume 85, Number 15 (Thursday, January 23, 2020)]
[Proposed Rules]
[Pages 4064-4092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00919]
[[Page 4063]]
Vol. 85
Thursday,
No. 15
January 23, 2020
Part IIDepartment of Agriculture-----------------------------------------------------------------------Food and Nutrition Service-----------------------------------------------------------------------7 CFR Parts 210, 215, 220, et al.Streamlining Program Requirements and Improving Integrity in the Summer
Food Service Program (SFSP); Proposed Rule
Federal Register / Vol. 85 , No. 15 / Thursday, January 23, 2020 /
Proposed Rules
[[Page 4064]]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 210, 215, 220, 225, and 226
[FNS-2019-0034]
RIN 0584-AE72
Streamlining Program Requirements and Improving Integrity in the
Summer Food Service Program (SFSP)
AGENCY: Food and Nutrition Service (FNS), USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rulemaking proposes to amend the Summer Food Service
Program (SFSP) regulations to strengthen program integrity by codifying
in regulations changes that have been tested through policy guidance
and by streamlining requirements among Child Nutrition Programs. These
changes update important definitions, simplify the application process,
enhance monitoring requirements, and provide more discretion at the
State agency level to manage program operations. The intended effect of
this rulemaking is to clarify, simplify, and streamline program
administration in order to facilitate compliance with program
requirements.
DATES: Written comments must be received on or before March 23, 2020 to
be assured of consideration.
ADDRESSES: The Food and Nutrition Service, USDA, invites interested
persons to submit written comments on this proposed rule. Comments may
be submitted in writing by one of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Mail: Send comments to Andrea Farmer, Chief, Community
Meals Branch, Policy and Program Development Division, USDA Food and
Nutrition Service, 1320 Braddock Place, Alexandria, VA 22314.
All written comments submitted in response to this
proposed rule 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. USDA will make the written
comments publicly available on the internet via http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Andrea Farmer, Chief, Community Meals
Branch, Policy and Program Development Division, USDA Food and
Nutrition Service, 3101 Park Center Drive, Alexandria, VA 22302, 703-
305-2590.
SUPPLEMENTARY INFORMATION:
I. Background
The Summer Food Service Program (SFSP) is authorized under section
13 of the Richard B. Russell National School Lunch Act (NSLA), 42
U.S.C. 1761. Its primary purpose is to provide free, nutritious meals
to children from low-income areas during periods when schools are not
in session.
Throughout the history of the SFSP, the United States Department of
Agriculture (USDA) has striven to provide good customer service to
children in need during the summer months while maintaining
accountability and integrity in program operations. The SFSP is one of
the USDA programs that collectively are known as the Child Nutrition
Programs. For the purposes of this proposed rule, Child Nutrition
Programs also include the National School Lunch Program (NSLP), School
Breakfast Program (SBP), Special Milk Program (SMP), and Child and
Adult Care Food Program (CACFP). Among Child Nutrition Programs, the
SFSP is unique in many ways, including the seasonal nature of its
operations, the diversity of organizations that participate in the
program, and the range of sites at which meals are offered. State
agencies, sponsors, and community organizations need flexibility to
operate the SFSP in a manner that is responsive to local conditions.
Such flexibility allows the SFSP to serve a diversity of communities
efficiently and effectively. To that end, USDA is continually exploring
options to increase administrative flexibility and reduce burden for
SFSP sponsors and State agencies to facilitate compliance with program
requirements.
To explore program options, USDA is dedicated to working
collaboratively with State agencies, local level organizations, program
operators, and the advocacy community to learn from their experiences
administering and operating the SFSP. USDA has a strong history of
soliciting feedback from stakeholders and participants in the SFSP
through:
Participation at multiple national conferences;
Nationwide workgroups including stakeholders from State
agencies, program operators, and advocacy groups to collect strategies
to improve the delivery of nutrition assistance to low-income children
in the summer months, boost participation, and reduce unnecessary
barriers to participation;
Listening sessions and webinars;
Partnerships with other government agencies, national
nonprofit organizations, and faith-based communities; and
A 2004 notice in the Federal Register (69 FR 3874 Page
3874) soliciting public comments on how to improve the program.
In response to the feedback received, USDA issued nationwide
flexibilities and nationwide waivers of program regulations to
facilitate sponsor and site participation and decrease paperwork
burdens on both State agencies and sponsors--see following table
entitled FNS Policy Memoranda Addressed in This Rule. While nationwide
waivers of program regulations have largely supported improved program
operations, the USDA Office of the Inspector General (OIG) audit
entitled ``FNS Controls Over the Summer Food Service Program'' (27601-
0004-41) prompted USDA to assess whether nationwide waivers issued
through policy memoranda complied with section 12(l) of the NSLA, which
provides the Secretary with the authority to waive certain statutory
and regulatory provisions. Through this assessment, USDA determined
that the issuance of certain nationwide waivers through policy
memoranda was not fully consistent with all requirements to waive
program regulations as outlined in section 12(l). As a result, USDA
rescinded several nationwide waivers through two memoranda:
SFSP 06-2018, Summer Food Service Program Memoranda
Rescission: SFSP 01-2007 and SFSP 06-2015, May 24, 2018; \1\ and
---------------------------------------------------------------------------
\1\ https://www.fns.usda.gov/sfsp/summer-food-service-program-memoranda-rescission-sfsp-01-2007-and-sfsp-06-2015.
---------------------------------------------------------------------------
SFSP 01-2019, Summer Food Service Program Memoranda
Rescission, October 11, 2018.\2\
---------------------------------------------------------------------------
\2\ https://www.fns.usda.gov/sfsp/summer-food-service-program-memoranda-rescission.
---------------------------------------------------------------------------
For summer 2019, State agencies or eligible service providers were
able to submit individual requests for waivers that they believed were
in the best interest of the program in their State, following the
requirements outlined in section 12(l) of the NSLA and policy
memorandum SP 15-2018, CACFP 12-2018, SFSP 05-2018: Child Nutrition
Program Waiver Request Guidance and Protocol--Revised, published May
24, 2018.\3\
---------------------------------------------------------------------------
\3\ https://www.fns.usda.gov/child-nutrition-program-waiver-request-guidance-and-protocol-revised.
---------------------------------------------------------------------------
[[Page 4065]]
The aforementioned nationwide waivers were developed based on
consistent input from stakeholders and have effectively supported
improved program operations. The process of approving individual waiver
requests for program year 2019 reaffirmed the continued value of these
flexibilities. State agencies justified their 2019 waiver requests with
goals of improved efficiency, reduced administrative cost, and
commitment to program integrity--specifically, the ability of both
program sponsors and State agencies to provide adequate and effective
program oversight with limited resources. As such, USDA is proposing to
codify many of the policies that were previously available as
nationwide waivers, as well as a number of flexibilities that are
currently available through policy guidance. In addition, USDA is
seeking comments on several proposals for removing barriers to
efficient program administration. Taken as a whole, the changes
proposed in this rule would maintain program integrity. They would
streamline SFSP requirements for sponsors that participate in other
Child Nutrition Programs; facilitate compliance with program monitoring
requirements; provide customer-friendly meal service; and clarify
program requirements. The following table details FNS policy memoranda
that are discussed in this rule, the specific provision(s) from each
memorandum that is discussed, the status of the waiver or flexibility,
and the section of the rule in which it is addressed.
FNS Policy Memoranda Addressed in This Rule
----------------------------------------------------------------------------------------------------------------
Provision addressed in
Policy memorandum rule Provision status Section of rule
----------------------------------------------------------------------------------------------------------------
Summer Food Service Program (SFSP) Determining Eligibility Rescinded in SFSP 01- VII. B
Waiver for Closed Enrolled Sites, for Closed Enrolled 2019.
November 17, 2002 1. Sites.
Field Trips in the Summer Food Reimbursement Claims Active................ VI. A
Service Program (SFSP) February 3, for Meals Served Away
2003 2 & FNS Instruction 788-13: from Approved
Sub-Sites in the Summer Food Locations.
Service Program.
SFSP 12-2011, Waiver of Site First Monitoring Site Rescinded in SFSP 01- IV. A
Monitoring Requirements in the Visits for Returning 2019.
Summer Food Service Program, April Sites.
5, 2011 3.
SFSP 05-2012, Simplifying Application Procedures Active................ III. A
Application Procedures in the for New CACFP Sponsors.
Summer Food Service Program,
October 31, 2011 4.
Demonstration of Active................ III. B
Financial and
Administrative
Capability for CACFP
Institutions.
SFSP 04-2013, Summer Feeding Options Application Procedures Active................ III. A
for School Food Authorities, for New SFA Sponsors.
November 23, 2012 5.
Demonstration of Active................ III. B
Financial and
Administrative
Capability for SFAs.
First Monitoring Site Rescinded in SFSP 01- IV. A
Visits for SFA 2019.
Sponsors.
SFSP 06-2014, Available First Monitoring Site Rescinded in SFSP 01- IV. A
Flexibilities for CACFP At-Risk Visits for CACFP or 2019.
Sponsors and Centers Transitioning SFA sponsors.
to SFSP, November 12, 2013 6.
SFSP 07-2014, Expanding Awareness Requirements for Media Active................ VI. C
and Access to Summer Meals, Release.
November 12, 2013 7.
SFSP 16-2015, Site Caps in the Establishing the Active................ IV. B
Summer Food Service Program-- Initial Maximum
Revised, April 21, 2015 8. Approved Level of
Meals for Vended
Sponsors.
SFSP 04-2017, Automatic Revocation Annual Verification of Active................ VI. D
of Tax-Exempt Status--Revised, Tax-Exempt Status.
December 1, 2016 9.
SFSP 06-2017, Meal Service Meal Service Times..... Rescinded in SFSP 01- V. A
Requirements in the Summer Meal ....................... 2019. .........................
Programs, with Questions and Off-site Consumption of Active................ V. B
Answers--Revised, December 05, 2016 Food Items.
10.
Offer versus Serve..... Rescinded in SFSP 01- V. C
2019.
SFSP 05-2018, Child Nutrition Overview of Statutory Active................ VIII. A
Program Waiver Request Guidance and Waiver Authority
Protocol--Revised, May 24, 2018 11. Request Process.
----------------------------------------------------------------------------------------------------------------
Endnotes:
\1\ No longer available.
\2\ https://www.fns.usda.gov/sfsp-020303.
\3\ No longer available.
\4\ https://www.fns.usda.gov/simplifying-application-procedures-summer-food-service-program.
\5\ https://www.fns.usda.gov/summer-feeding-options-school-food-authorities.
\6\ https://www.fns.usda.gov/available-flexibilities-cacfp-risk-sponsors-and-centers-transitioning-summer-food-service-program.
\7\ https://www.fns.usda.gov/expanding-awareness-and-access-summer-meals.
\8\ https://www.fns.usda.gov/site-caps-summer-food-service-program-revised.
\9\ https://www.fns.usda.gov/sfsp/automatic-revocation-tax-exempt-status%E2%80%93revised.
\10\ https://www.fns.usda.gov/meal-service-requirements-summer-meal-programs-questions-and-answers-%E2%80%93-revised revised.
\11\ https://www.fns.usda.gov/child-nutrition-program-waiver-request-guidance-and-protocol-revised.
II. Reorganization of Sec. 225.6
As stated in the summary and background, the purpose of this
proposed rule is to streamline and clarify program requirements. In
order to meet that goal, this rule proposes to reorganize and
streamline Sec. 225.6 to more clearly present existing State agency
requirements.
The proposed changes reorganize requirements in Sec. 225.6(c),
Content of sponsor application, to more clearly outline the
requirements for complete applications. Provisions found in Sec.
225.6(c)(2) related to site information sheets would move to a new
paragraph (g); provisions in Sec. 225.6(c)(4) related to
[[Page 4066]]
the free meal policy statement would move to a new paragraph (f).
The proposed changes would also reorder current Sec. 225.6(d)
through (i). This reorganization is necessary in order to add new
paragraphs related to performance standards for determining financial
and administrative capability (new paragraph (d)), and sponsor
submission of a management plan (new paragraph (e)), both of which are
described in more detail in the next section of this preamble. The
table below provides an outline of the proposed revisions:
------------------------------------------------------------------------
Current outline Proposed outline
------------------------------------------------------------------------
a. General Responsibilities............ a. General responsibilities.
b. Approval of sponsor applications.... b. Approval of sponsor
applications.
c. Content of sponsor application...... c. Content of sponsor
application.
1. Application forms............... 1. Application form.
2. Requirements for new sponsors, 2. Application requirements
new sites, and, as determined by for new sponsors and sponsors
the State agency, sponsors and that have experienced
sites which have experienced significant operational
significant operational problems problems in the prior year.
in the prior year. 3. Application requirements for
experienced sponsors.
3. Requirements for experienced 4. Application requirements
sponsors and experienced sites.. for School Food Authorities and
Child and Adult Care Food
Program Institutions.
d. Performance standards
1. Performance standard 1.
2. Performance standard 2.
3. Performance standard 3.
e. Management plan.
4. Free meal policy statement...... f. Free meal policy statement.
5. Hearing procedures statement.... 1. Nondiscrimination
statement.
2. Hearing procedures
statement.
g. Site information sheets
1. New sites.
2. Experienced sites.
d. Approval of sites................... h. Approval of sites.
e. State-sponsor agreement............. i. State-sponsor agreement.
f. Special account..................... j. Special account.
g. FSMC registration................... k. Food Service Management
Company registration.
h. Monitoring of FSMC procurements..... l. Monitoring of Food Service
Management Company
procurements.
i. Meal pattern exceptions............. m. Meal pattern exceptions.
------------------------------------------------------------------------
III. Streamlining Program Requirements
USDA is committed to decreasing paperwork burden across Child
Nutrition Programs. In conjunction with decreasing paperwork, USDA has
also found that supporting SFSP program operators that successfully
operate other Child Nutrition Programs ensures that taxpayer money is
used most efficiently. Therefore, through policy guidance, USDA has
identified several ways to streamline the application process for SFSP
sponsors also participating in the NSLP and/or the CACFP that reduce
administrative burden when applying to participate in the SFSP.
A. Application Procedures for New Sponsors
Current regulations in Sec. 225.6(c) outline specific requirements
for sponsors and sites applying to participate in the SFSP. The
regulations in Sec. 225.6(c)(2) require certain procedures for new
sponsors, and sponsors that have experienced significant operational
problems in the previous year, as determined by the State agency. For
both new sponsors and those with operational problems, detailed
information is required regarding site information, arrangements for
meeting health and safety standards, and budgets, among other things.
This information is necessary for State agencies to determine if new
sponsors and sites, or those with previous operational problems, are
capable of running the SFSP efficiently and effectively, and complying
with all program requirements, thus maintaining program integrity.
For experienced sponsors that have already operated the SFSP
without significant operational problems, applications must include
condensed information that is more likely to change from year to year,
as currently outlined in Sec. 225.6(c)(3). Experienced sponsors are
not required to submit the same level of detail with regard to
organizational and operational information required of new sponsors and
those with previous operational problems.
In an effort to recruit eligible organizations that have already
proven capable of successfully running other Child Nutrition Programs,
USDA outlined flexibilities in several policy memoranda for NSLP and
CACFP sponsors in good standing (SFSP 05-2012, Simplifying Application
Procedures in the Summer Food Service Program, October 31, 2011 and
SFSP 04-2013, Summer Feeding Options for School Food Authorities,
November 23, 2012). Through policy guidance, a sponsor is considered to
be in ``good standing'' if it has been reviewed by the State agency in
the last 12 months and had no major findings or program violations, or
completed and implemented all corrective actions from the last
compliance review. In addition, a sponsor may be considered in good
standing if it has not been found to be seriously deficient by the
State agency in the past two years and has never been terminated from
another Child Nutrition Program.
The published guidance outlines flexibilities for school food
authorities (SFAs) administering the NSLP or SBP and CACFP institutions
in good standing that are applying to serve SFSP meals at the same
sites where they provide meal services through the NSLP, SBP, or CACFP
during the school year. Under this guidance, these institutions are
permitted to follow the application requirements for experienced SFSP
sponsors currently found in Sec. 225.6(c)(3) instead of the
application requirements for new sponsors and sites currently found in
Sec. 225.6(c)(2). While the guidance streamlines the requirements
among programs, it also requires that NSLP or SBP SFAs and CACFP
institutions using the experienced sponsor application procedures
provide the following information:
[[Page 4067]]
Whether the site is rural or non-rural;
Whether the site's food service will be self-preparation
or vended; and
If a site will primarily serve the children of migrant
families, certification from a migrant organization that the site
serves children of migrant worker families and that it primarily serves
migrant children if it also serves non-migrant children.
This additional site information is necessary for the State agency
to make a determination about the approval of sites for experienced
sponsors. Further, this rule proposes to provide State agencies the
discretion to allow NSLP and SBP SFAs and CACFP institutions applying
for participation in the SFSP for the first time to use this
flexibility.
Accordingly, this rule proposes to codify under Sec. 225.6(c)(4)
the flexibilities extended through policy guidance for NSLP and SBP
SFAs and CACFP institutions to use procedures for experienced sponsors.
B. Demonstration of Financial and Administrative Capability
Currently, SFSP regulations require sponsors applying to
participate in the Program to demonstrate financial and administrative
capability for program operations and accept financial responsibility
for total program operations at all sites at which they propose to
conduct a food service (Sec. 225.14(c)(1)). These two operational
aspects underpin program integrity and promote effective use of
taxpayer money. Demonstration of financial and administrative
capability can include, but is not limited to, submission of budgets,
financial records, documentation of organizational structure, and menu
planning.
In order to streamline Child Nutrition Program requirements and
encourage participation, USDA issued policy guidance that provided that
NSLP and SBP SFAs and CACFP institutions in good standing applying to
participate in the SFSP are not required to submit further evidence of
financial and administrative capability, as required in Sec.
225.14(c)(1) (SFSP 05-2012, Simplifying Application Procedures in the
Summer Food Service Program, October 31, 2011 and SFSP 04-2013, Summer
Feeding Options for School Food Authorities, November 23, 2012). NSLP
and SBP SFAs and CACFP institutions already undergo a rigorous
application process in order to participate in NSLP, SBP, and CACFP and
have demonstrated that they have the financial and organizational
viability, capability, and accountability necessary to operate a Child
Nutrition Program; therefore, they have the capacity to operate the
SFSP as well.
While the flexibility to not submit further evidence of financial
and administrative capability is intended to decrease burden on both
State agencies and sponsors applying for the program, State agencies
must still be aware of the ways in which NSLP and SBP SFAs and,
particularly, CACFP institutions have demonstrated their financial and
administrative capabilities in the past. If the State agency has a
reasonable belief that the operation of the SFSP would pose significant
challenges for an NSLP or SBP SFA or CACFP sponsor applicant, the State
agency may request additional evidence of financial and administrative
capacity sufficient to ensure that the sponsor has the ability and
resources to expand. For example, if an NSLP or SBP SFA or CACFP
institution had a finding during a local review, the State agency may
request additional evidence of financial and administrative capacity to
demonstrate ability to administer the SFSP. Additionally, in certain
instances, different State agencies are responsible for the
administration of the SFSP and school meals or CACFP. In these
instances, to protect the integrity of the SFSP and ensure that
financially and administratively capable sponsors are approved to
operate the program, State agencies must share relevant sponsor
information, including, but not limited to:
Demonstration of fiscal resources and financial history;
Budget documents;
Demonstration of appropriate and effective management
practices; and
Demonstration of adequate internal controls and other
management systems in effect to ensure fiscal accountability.
As this proposed rule would require State agencies to develop a
process for sharing information across agencies if the agency that
administers the SFSP is not the same as the one administering school
meals or the CACFP, USDA is specifically seeking comment on the
challenges and benefits of this requirement. Specifically, USDA is
interested in the following questions:
Would the sharing of information help improve the
integrity of the program?
Would developing an information sharing process create
undue burden on State agencies?
What are the potential costs of developing an information
sharing process?
Accordingly, this rule proposes to amend regulations found at Sec.
225.14(c)(1) to include the flexibility outlined in previous guidance
that SFAs and CACFP institutions in good standing applying to operate
the SFSP do not have to provide further evidence of financial and
administrative capabilities. In addition, this rule proposes to add a
requirement that State agencies develop an information sharing process
if programs are administered by separate agencies within the State.
C. Clarifying Performance Standards for Evaluating Sponsor Viability,
Capability, and Accountability
Organizations applying to participate as sponsors in the SFSP must
demonstrate ``financial and administrative capability for program
operations'' (Sec. 225.14(c)(1)). It is critical for State agencies to
determine if an applicant has the potential to be viable, capable, and
accountable for operating the SFSP with program integrity, and will
accept financial and administrative responsibility at all sites it
intends to operate. While USDA has provided technical assistance for
how State agencies should determine if a sponsor is financially and
administratively capable, the regulations do not include specific
metrics for assessing an applicant's capability for successful program
participation. As a result, USDA has received requests from State
agencies to provide additional clarity on the application requirements
in Sec. 225.14(c)(1).
In response to State agency requests regarding application
requirements, and in an effort to streamline requirements across
programs, this rule proposes to add performance standards for
organizations applying to participate as SFSP sponsors that correspond
to standards currently in place at Sec. 226.6 for organizations
applying to participate as CACFP sponsors. These detailed performance
standards under Sec. 226.6 assist State agencies in assessing an
applicant's financial viability and financial management,
administrative capability, and accountability. In addition, the rule
clarifies that sponsors must demonstrate compliance with these
performance standards as part of their management plan. USDA recognizes
that program operations, requirements, and monitoring responsibilities
differ between the CACFP and the SFSP. However, the proposed standards
would ensure that an organization meets basic requirements for
operating any Child Nutrition Program. These standards would apply
equally to the CACFP and the SFSP, and would provide more clarity to
State agencies responsible for evaluating sponsor applications in SFSP.
[[Page 4068]]
USDA recognizes that including these detailed performance standards
in the management plan may require some State agencies and sponsors to
modify current practices. Although USDA prioritizes flexibility for
stakeholders to the greatest extent possible, these changes would
bolster program integrity by supporting the ability of State agencies
to more efficiently and consistently evaluate an applicant sponsor's
financial and administrative capability. The proposed performance
standards and management plan align with current regulations requiring
sponsors to demonstrate financial and administrative capability for
program operations.
The proposed standards are composed of three main performance
elements. Performance standard 1 addresses financial viability and
financial management, performance standard 2 addresses administrative
capability, and performance standard 3 addresses internal controls and
management systems that ensure program accountability. The proposed
regulations include additional criteria for assessing each performance
standard. It is important to note that these standards would not
require anything new of SFSP operators. These standards are intended to
clarify existing SFSP requirements and provide support and guidance to
State agencies when evaluating sponsor applications.
Accordingly, this proposed rule would add performance standards for
determining sponsor financial viability, administrative capability, and
program accountability in a new Sec. 225.6(d) against which State
agencies must evaluate an applicant sponsor's financial and
administrative capabilities. This rule also proposes to require in
Sec. 225.6(c)(2)(i) and new Sec. 225.6(e) the submission of a
management plan demonstrating compliance with the performance standards
in the new Sec. 225.6(d). Finally, this rule would amend Sec. Sec.
225.14(a), 225.14(c)(1), and 225.14(c)(4) to reference application
requirements, performance standards, and the management plan,
respectively, in the reorganized Sec. 225.6.
IV. Facilitating Compliance With Program Monitoring Requirements
A. First Week Site Visits
Section 225.15(d)(2) of the current regulations requires sponsors
to visit each of their sites at least once during the first week of
operation in the program. The purpose of conducting monitoring visits
during the first week of site operation is for the sponsor to provide
technical assistance to improve service delivery and to take action to
promptly correct any deficiencies in program operations at the site
level.
USDA has received consistent feedback from State agencies and
sponsors, through a national stakeholder workgroup and other means,
that some sponsors lack sufficient resources to conduct monitoring
visits during the first week of operation at all site locations.
Minimal staff to conduct visits, large distances between sites,
particularly in rural areas, and insufficient funding were all cited as
barriers to fulfilling this requirement. In order to provide sponsors
the option to target their technical assistance and monitoring
resources towards activities that will have the greatest impact on
program integrity, USDA issued policy guidance that waived the
requirement that sponsors visit sites during the first week of
operation for the following:
Sponsors in good standing in the NSLP or CACFP (SFSP 04-
2013, Summer Feeding Options for School Food Authorities, November 23,
2012 and SFSP 06-2014, Available Flexibilities for CACFP At-Risk
Sponsors and Centers Transitioning to SFSP, November 12, 2013,
respectively); and
Sites that had operated successfully the previous summer
(or other most recent period of operation) and had no serious
deficiency findings (SFSP 12-2011, Waiver of Site Monitoring
Requirements in the Summer Food Service Program, April 5, 2011).
The waivers noted above were rescinded in 2018, as discussed in the
background section of this proposed rule. Through implementation of
these waivers for a number of years, USDA learned that waiving the
first week site visit requirement eased burden for the sponsors and
sites that met the requirements of the waiver. However, USDA also
determined that site visits during the first weeks of operation are a
crucial part of program monitoring and benefit sponsors and sites of
all types. Early site visits facilitate good sponsor management at
every site and ensure that site supervisors and staff are receiving the
technical assistance needed to operate the SFSP in compliance with all
program requirements, thereby maintaining program integrity.
As such, USDA is proposing to amend this site visit requirement in
Sec. 225.15(d)(2) to provide flexibility in the timeframe during which
first monitoring visits must take place. This proposed rule would
create a tiered framework, under which sponsors responsible for the
management of 10 or fewer sites would be required to conduct the first
site monitoring visit within the first week (seven calendar days) after
the site begins program operations. Sponsors responsible for the
management of more than 10 sites would be required to conduct the first
site monitoring visits within the first two weeks (14 calendar days)
after the site begins program operations. In cases where a site
operates for one week or less, the site visit must be conducted during
the period of operation. Based on currently available data from studies
conducted by USDA and collected from State agencies, over 80 percent of
sponsors participating in the program operate 10 sites or fewer. While
this change would not impact the majority of sponsors, this flexibility
would help alleviate logistical burdens for larger sponsors while
strengthening monitoring practices.
In addition, the proposed rule includes changes to the current
regulatory requirement that sponsors must conduct a review of the food
service at each site during the first four weeks of program operations
(Sec. 225.15(d)(3)). The proposed rule would allow these food service
reviews to occur at the same time as the first monitoring visit. This
would provide all sponsors with the opportunity to manage their
resources in a way that best suits their program operations.
The intent of these changes is to allow sponsors of different sizes
to adequately distribute their resources as necessary. USDA recognizes
that through the waiver process conducted for summer 2019, many State
agencies expressed the need for significant flexibilities related to
first week site visits. USDA seeks to balance program integrity and
administrative flexibilities and will consider all comments in drafting
the final rule. To understand the full impact of these proposed
changes, USDA is seeking specific comments on the:
Number of sites that sponsors manage;
Number of staff available to conduct site visits;
Logistics of conducting site visits;
Time and resources necessary, as well as any other
factors, that impact the ability of sponsors to fulfill this
requirement;
Proposed tiers and whether this provides sufficient
flexibilities for sponsors; and
Benefits of requiring first monitoring visits at all sites
versus those sites that are new to the program or experienced
operational or administrative difficulties in the past.
While the data shows that the vast majority of sponsors are
responsible for program operations at 10 sites or fewer,
[[Page 4069]]
USDA is interested in learning more about how the tiers, as proposed,
would affect sponsors of different sizes and that operate under varying
conditions.
Accordingly, this rule proposes to amend Sec. 225.15(d)(2) of the
regulations to create a tiered framework for first monitoring visits.
This rule also proposes to amend Sec. 225.15(d)(3) to allow sponsors
to conduct a first monitoring visit and a food service review at the
same time.
B. Establishing the Initial Maximum Approved Level of Meals for Sites
of Vended Sponsors
Program regulations found at Sec. 225.6(d) require that, when
approving the application of a site, State agencies must establish for
each meal service an approved level for the maximum number of
children's meals which may be served under the program. This limit on
the number of meals that may be served is commonly known as a ``site
cap.'' For sites that prepare the meals that will be served and do not
contract with a food service management company, this cap on the number
of meals served may be no more than the number of children for which
the facilities are adequate (Sec. 225.6(d)(1)(iii)). For sites that
purchase meals from a food service management company, the regulations
require that the initial maximum approved level be based on historical
attendance, or by another procedure developed by the State agency if no
accurate record from prior years is available. Once established, site
caps may be increased or decreased based on information collected
during site reviews or other documentation provided to the State agency
by the sponsor demonstrating the need for an adjustment (Sec.
225.6(d)(2)). The regulations further require that State agencies
disallow payment on any meals served over the site cap at vended sites
(Sec. 225.11(e)(3)).
The purpose of a site cap is to encourage sponsors and State
agencies to work closely together to develop reasonable estimates of
anticipated site attendance. This ensures that a site does not purchase
or produce meals outside of the capacity of the site and the needs of
the community. Site caps are also an important tool for State agencies
to monitor program management and determine if there is need for
technical assistance or corrective action to ensure program integrity.
As such, State agencies should work with sponsors to establish
reasonable site caps that reflect the true capacity and capability of
sites. However, USDA understands that State agencies and sponsors may
have difficulty accurately assessing the capability of a site or the
full needs of a community before operations begin. Circumstances may
arise in which a site attracts more children than originally
anticipated, such as an increase in the number of children coming for
programs or activities offered at the same location. In other cases, a
lack of historical data makes it difficult for State agencies and
sponsors to accurately forecast participation levels.
In order to allow sponsors of vended sites to make timely
adjustments to program operations, USDA issued policy guidance
clarifying that sponsors may request an increase to existing site caps
at any time prior to the submission of the meal claim forms for
reimbursement that includes meals served in excess of the site cap
(SFSP 16-2015, Site Caps in the Summer Food Service Program--Revised,
April 21, 2015). As with any change to program operations, this
guidance clarified that State agencies have the discretion to approve
the request. Providing sponsors of vended sites the flexibility to
adjust site caps prior to submitting a claim for reimbursement gives
them the freedom to right-size their program operations in real time,
be responsive to local conditions, and provide better customer service
to their communities. For sites with no accurate historical
information, USDA recommends the State agency consider participation at
other similar sites located in the same area, documentation of
programming taking place at the site, or statistics on the number of
children residing in the area when determining initial site caps.
Accordingly, this rule proposes to amend Sec. 225.6(h)(2)(iii) of
the regulations, as re-designated through this rule, to clarify that
sponsors of vended sites may request an adjustment to the maximum
approved level of meal service at any time prior to submitting a claim
for reimbursement. This rule would also amend Sec. 225.6(h)(2)(i), as
redesignated through this rule, to include further guidance for
determining the maximum approved level of meal service for sites
lacking accurate records from prior years.
C. Statistical Monitoring Procedures, Site Selection, and Meal Claim
Validation for Site Reviews
State agencies are responsible for reviewing sponsors and sites to
ensure compliance with program regulations. Current regulations in
Sec. 225.7(d)(2) discuss the frequency and number of required reviews,
including the requirement in Sec. 225.7(d)(2)(ii)(E) that a State
agency conducting a sponsor review must review at least 10 percent of
the sponsor's sites, or one site, whichever number is greater. USDA
guidance also instructs State agencies to validate 100 percent of all
meal claims from all sites under a sponsor that is being reviewed.
To provide flexibility to State agencies conducting sponsor and
site reviews, Sec. 225.7(d)(8) affords State agencies the option to
use statistical monitoring procedures in lieu of the site monitoring
requirements found in Sec. 225.7(d)(2). However, USDA regulations and
guidance do not provide clear instructions for how to develop and
implement statistical monitoring procedures. In addition, USDA is not
aware of any States that currently use statistical monitoring
procedures. USDA reviewed feedback from State agencies, analyzed
current State practices for selecting sites, and considered related
sampling models that could be adapted as guidelines for statistical
monitoring of sites in the SFSP. Through this process, USDA determined
that it is not possible to create standard statistical monitoring
procedures that will meet the needs of the program. As a result, USDA
is proposing to remove the provision in Sec. 225.7(d)(8) which
currently allows the use of statistical monitoring for site reviews.
This rule will not change the current requirement that State
agencies conduct reviews of at least 10 percent of each sponsor's
sites, or one site, whichever number is greater. The rule proposes to
increase the effectiveness of site reviews by providing guidance to
assist State agencies and sponsors in selecting a sample of sites that
is generally reflective of the variety of all a sponsor's sites.
Through this guidance, site characteristics that will be reflected in a
sponsor's sample include:
The maximum number of meals approved to serve under
Sec. Sec. 225.6(h)(1)(iii) and 225.6(h)(2), as redesignated through
this rule;
Method of obtaining meals (i.e., self-preparation, vended
meal service);
Time since last review by the State agency;
Site type (i.e., open, closed enrolled, camp);
Type of physical location (e.g., school, outdoor area,
community center);
Rural designation (i.e., rural, as defined in Sec. 225.2,
non-rural); and
Affiliation with the sponsor, as defined in Sec. 225.2.
The State agency may use additional criteria to select sites
including, but not limited to: Recommendations from the sponsoring
organization, findings of other audits or reviews, or any indicators of
potential error in daily meal counts (e.g., identical or very
[[Page 4070]]
similar claiming patterns, or large changes in meal counts).
Additionally, this rule proposes a new method for conducting meal
claim validations as a part of the sponsor review. USDA recognizes that
conducting 100 percent meal claim validations for all sites under the
sponsor being reviewed, instead of just the sampled sites, may be
burdensome for some State agencies. In the case of large sponsors with
many sites, this requirement often uses significant State agency
resources and, based on feedback from State agencies, does not
necessarily help improve the integrity of the program. For sponsors
that run effective programs in compliance with program requirements,
only a small portion of meal claims may need to be validated in order
to confirm compliance. In recognition of this, the proposed changes
would include a multi-step approach to site-based meal claim
validation. State agencies would initially validate a small sample of
claims and would only be required to validate additional claims if
sufficient error is detected. The proposed method is shown in the table
below.
Meal Claim Validation Process
------------------------------------------------------------------------
Step Outcome Result
------------------------------------------------------------------------
Step 1: Validate 100 percent An average The review
of meal claims only for the percent error of of meal claims for
sites being reviewed to less than 5 this sponsor is
satisfy the requirement that percent is found. complete.
State agencies must review 10 An average If
percent of sites, or one percent error of necessary, the State
site, whichever is greater, 5 percent or agency must take
operated by the sponsor being more is found.. fiscal action per
reviewed. the disregard
threshold
established for
SFSP.
The State
agency must move to
Step 2.
Step 2: Expand validation of An average The review
meal claims to all meals for percent error of of meal claims for
the review period for 25 less than 5 this sponsor is
percent of the sponsor's percent is found complete.
total sites. in the If
additional sites necessary, the State
validated. agency must take
An average fiscal action per
percent error of the disregard
5 percent or threshold
more is found in established for
the additional SFSP.
sites validated.. The State
agency must move to
Step 3.
Step 3: Expand validation of An average The review
meal claims to all meals for percent error of of meal claims for
the review period for 50 less than 5 this sponsor is
percent of the sponsor's percent is found complete.
sites. in the If
additional sites necessary, the State
validated. agency must take
An average fiscal action per
percent error of the disregard
5 percent or threshold
more is found.. established for
SFSP.
The State
agency must move to
Step 4.
Step 4: Expand validation of An average The review
meal claims to all meals for percent error of of meal claims for
the review period for 100 less than 5 this sponsor is
percent of the sponsor's percent is found complete.
total sites. in the If
additional sites necessary, the State
validated. agency must take
An average fiscal action per
percent error of the disregard
5 percent or threshold
more is found.. established for
SFSP.
The review
of meal claims for
this sponsor is
complete.
The State
agency must take
fiscal action, per
the disregard
threshold
established for
SFSP.
------------------------------------------------------------------------
* Fractions must be rounded up (>=0.5) or down (R = total meals claimed by sponsor for reviewed sites
MVR = total meals validated by State agency for reviewed
sites
This incremental approach is intended to use State agency resources
more efficiently and provide State agencies with a more targeted method
for review. USDA is requesting specific comments on this process,
including the anticipated impact on State agencies and burden, the
accuracy of claim validations under this process, and the stepped
increases and the percentage expanded at each step.
Accordingly, Sec. 225.7(e)(5), as redesignated in this rule,
includes site selection criteria. Section 225.7(e)(6), as redesignated
in this rule, proposes a method for conducting meal claim validations.
The proposed rule also removes the option for statistical monitoring
currently found in Sec. 225.6(d)(8). Finally the rule proposes to
renumber and rephrase portions of Sec. 225.7 to make the regulations
easier to understand.
V. Providing a Customer-Service Friendly Meal Service
A. Meal Service Times
Section 225.16(c) of the current regulations sets forth
restrictions on when meals can be served in the SFSP. Three hours are
required to elapse between the beginning of one meal service, including
snacks, and the beginning of another, with the exception that four
hours must elapse between the service of a lunch and supper when no
snack is served between lunch and supper. Further, the regulations
state that the service of supper cannot begin later than 7 p.m., unless
the State agency has granted a waiver of this requirement due to
extenuating circumstances; however, in no case may the service of
supper extend beyond 8 p.m. The duration of the meal service is limited
to two hours for lunch or supper and one hour for all other meals.
These restrictions do not apply to residential camps.
These strict requirements did not provide sufficient control at the
State agency and sponsor level to allow for planned meal services that
meet the needs of the community. Dating as far back as 1998, USDA has
issued guidance that waives these requirements at certain sites where
the requirements proved to create significant barriers to
[[Page 4071]]
efficient program operations and good customer service for the
communities served. USDA heard consistent feedback from stakeholders
that the restrictions presented challenges to aligning meal services
with access to public transportation and community services. The waiver
of meal time restrictions helped decrease administrative burden and
provided more local level control to sponsors to plan the most
effective meal services, thereby improving program operations.
Therefore, in 2011, USDA published guidance that waived the meal
service time restrictions for all SFSP sites while still requiring
sponsors to submit meal service times to the State agency for approval
(originating guidance has since been superseded and incorporated into
SFSP 06-2017, Meal Service Requirements in the Summer Meal Programs,
with Questions and Answers--Revised, December 05, 2016). These waivers
were rescinded in 2018, as discussed in the background section of this
proposed rule. In 2019, 42 State agencies requested a waiver of meal
time restrictions to allow them to continue implementation of what had
previously been in effect through guidance. Of those 42 State agencies,
39 asserted that the waiver would result in improved program operations
and, therefore, efficient use of resources.
USDA supports flexibilities that provide the best possible customer
service without compromising program integrity. Through implementation
of this waiver for many years, USDA learned that allowing sponsors and
State agencies more latitude to schedule meal service times gives
sponsors the ability to best meet the needs of their community.
However, removing meal service time restrictions also allowed for meal
services to be scheduled one right after another, without any time
elapsing between the end of one meal service and the beginning of
another. This is not in keeping with the intent of the SFSP to maintain
service of distinct meals, and poses a potential risk to program
integrity by making it more difficult for sites to keep accurate
records of meals served and to monitor the meal service itself.
Therefore, this rulemaking proposes to remove all existing meal service
time restrictions, and would add a requirement that, at all sites
except residential camps, a minimum of one hour must elapse between the
end of one meal service and the beginning of another. While this rule
is proposing to remove meal time restrictions, USDA encourages State
agencies to work with sponsors to establish distinct meal times that
not only meet the needs of the community, but also allow the State
agency to conduct all necessary monitoring requirements. State agencies
should only approve extended meal service times if they have the
capability to properly monitor the sites.
Sponsors have also expressed the need for flexibilities to conduct
meal services in the event of an unforeseen circumstance, such as a
delayed delivery. Therefore, USDA also proposes to allow a State agency
to approve for reimbursement meals served outside of the approved meal
service time if an unanticipated event, outside of the sponsor's
control, occurs. The State agency may request documentation to support
approval of meals claimed when unanticipated events occur.
In recent years, it has come to USDA's attention that some sponsors
have served a meal, which meets the meal pattern requirements for
breakfast, in the afternoon after a lunch service was provided and
claimed this meal as a reimbursable ``breakfast.'' The SFSP is
statutorily designed to support ``programs providing food service
similar to food service made available to children during the school
year'' under the NSLP and SBP (42 U.S.C. 1761(a)(1)(D)). Currently,
regulations governing the SBP define breakfast as a meal which is
served to children in the morning hours and must be served ``at or
close to the beginning of the child's day at school'' (7 CFR 220.2). As
such, the service of a reimbursable, three component meal, or
``breakfast'', in the afternoon following the service of lunch is not
supported by the statute. Therefore, a meal otherwise meeting the
requirements for a breakfast meal is not eligible for reimbursement as
a breakfast if it is served after any lunch or supper has been served
and claimed for reimbursement.
This rule also proposes to amend Sec. 225.16(c) to make it easier
for users to locate and understand key information. Section
225.16(c)(1) will consolidate meal service time requirements currently
referenced in other sections of part 225. This would specify that meal
service times must be established by the sponsor for each site, be
included in the sponsor's application, and be approved by the State
agency. Current Sec. 225.16(c)(6), which specifies that a sponsor may
claim for reimbursement only the type(s) of meals for which it is
approved to serve, would move to Sec. 225.16(b). In addition, a
reference to approved meal service times would be added to the State-
sponsor agreement information in redesignated Sec. 225.6(i)(7)(iv).
Accordingly, this proposed rule would amend Sec. 225.16(c) to:
Remove meal service time restrictions;
Add a requirement that a minimum of one hour elapse
between the end of one meal service and the beginning of another;
Allow a State agency to approve for reimbursement meals
served outside of the approved meal service time if an unanticipated
event occurs;
Clarify that meals claimed as a breakfast must be served
at or close to the beginning of a child's day, and prohibit a three
component meal from being claimed for reimbursement as a breakfast if
it is served after a lunch or supper is served; and
Reorganize Sec. 225.16(c) to improve the clarity of the
text.
This proposed rule would also amend Sec. Sec. 225.16(b) and
225.6(i)(7)(iv) to improve the clarity of the regulations.
B. Off-Site Consumption of Food Items
Serving children in a supervised, safe, and congregate setting is a
strength of the SFSP. Feeding children in a group setting has many
benefits such as providing an opportunity for children to socialize,
creating time for sites to offer activities, and allowing adults to
monitor food safety and encourage healthy eating practices. The
statutory requirement that children consume program meals onsite is
found in the NSLA, which states that meal service in the SFSP is to be
``similar to food service made available to children during the school
year'' under the NSLP and SBP (42 U.S.C. 1761). Current regulations
provide that sponsors must agree to ``maintain children on site while
meals are consumed'' (Sec. 225.6(e)(15)). USDA has heard from
stakeholders that, in some cases, the congregate feeding requirement
poses a barrier to participation and compliance with program
requirements. Program operators have expressed that some children,
particularly those who are younger, are unable to eat all of the meal
components in one sitting and have suggested that they be allowed to
take certain components off-site for later consumption. Further,
sponsors and site supervisors have raised concerns about plate waste
and the need to provide as much nutritious food as possible to children
who receive a meal but may not be able to consume a complete meal in
one sitting. As the SFSP operates in a wide variety of settings,
including sites that do not offer activities or programming separate
from the meal service, some sponsors report that keeping children on
site for the entire consumption of the meal offered is challenging.
[[Page 4072]]
USDA initially issued guidance in 1998 that provided flexibilities
for a fruit or vegetable item of the meal to be taken off-site for
later consumption, with State agency approval, for sponsors with
adequate staffing to administer this option (originating guidance has
since been superseded and incorporated into SFSP 06-2017--Meal Service
Requirements in the Summer Meal Programs, with Questions and Answers--
Revised, December 5, 2016 \4\). USDA subsequently amended this
flexibility in response to stakeholder feedback that it could be
implemented in a way that maintained health and safety requirements. In
2013, USDA issued guidance that extended this option to all sponsors
without the requirement for State agency approval, and expanded the
eligible food items to include grains, allowing for a single item of
fruit, vegetable, or grain to be taken off-site for later consumption
(originating guidance has since been superseded and incorporated into
SFSP 06-2017). However, the guidance maintained the State agencies'
discretion to prohibit individual sponsors on a case-by-case basis from
using the option if the State agency had concerns about adequate site
monitoring, and provided that the State agency's decision to prohibit a
sponsor from utilizing this option is not an appealable action. This
flexibility is still in effect and is found in guidance issued in SFSP
06-2017.
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In order to provide flexibilities that are responsive to
stakeholder needs, USDA is seeking specific comments on State agencies'
ability to monitor the effective implementation of this option.
Additionally, USDA is interested in learning whether State agencies
would use the discretion to prohibit certain sponsors from utilizing
this option on a case-by-case basis.
Accordingly, this rule proposes to codify the flexibility for
sponsors to allow children to take certain food items (i.e., fruit,
vegetable, or grain items) off-site for later consumption by amending
Sec. 225.6(i)(15), as redesignated through this rule, and adding a new
Sec. 225.16(h).
C. Offer Versus Serve
Current regulations in Sec. 225.16(f)(1)(ii) allow SFAs that are
program sponsors to ``permit a child to refuse one or more items that
the child does not intend to eat.'' This concept is known as ``offer
versus serve'' (OVS). The regulations also require that an SFA using
the OVS option must follow the requirements for the NSLP set out in
Sec. 210.10. Finally, the regulations state that the sponsor's
reimbursement must not be reduced if children do not take all required
food components of the meal that is offered.
OVS is a useful tool that applies to menu planning and meal
service, which allows children to decline some of the food offered in a
reimbursable breakfast, lunch, or supper, excluding snacks. The goals
of OVS are to simplify program administration and reduce food waste and
costs while maintaining the nutritional integrity of the SFSP meal that
is served. As the SFSP operates on a short timeframe, efficiently
managing costs is a significant concern for sponsors. USDA has explored
many options to help sponsors maintain effective practices that reduce
costs while maintaining high quality meal service. The use of OVS was
first extended to SFSP operations through the Personal Responsibility
and Work Opportunity Act of 1996 (Pub. L. 104-193) which permitted SFAs
sponsoring the SFSP to use OVS on school grounds. This change was made
on the basis that since the option is regularly implemented during the
school year, these sponsors could successfully implement the option
during the summer. Recognizing that OVS was a useful tool to reduce
food waste and food costs, the William F. Goodling Child Nutrition
Reauthorization Act of 1998 (Pub. L. 105-336) extended the use of OVS
to all SFSP sites sponsored by SFAs.
OVS has proved to be a popular method among both sponsors and
participants.
After observing SFA sponsors successfully utilizing the option for
many years and receiving significant feedback from stakeholders,
including Congressional testimony about the positive effects of OVS on
reducing food waste and containing program costs, USDA extended the
option to use OVS to non-SFA sponsors (SFSP 11-2011, Waiver of Meal
Time Restrictions and Unitized Meal Requirements in the Summer Food
Service Program, October 31, 2011). USDA continued to clarify policies
surrounding OVS, including guidelines for required meal service
components under the SFSP meal pattern (SFSP 08-2014, Meal Service
Requirements, November 12, 2013) and extending the use of the SFSP OVS
meal pattern guidelines to SFA sponsors that had previously been
required to follow the OVS requirements for the NSLP (SFSP 05-2015
(v.2), Summer Meal Programs Meal Service Requirements Q&As--Revised,
January 12, 2015). This guidance took into account the distinguishing
nature of the SFSP and NSLP, including variations in settings and
resources, and adjusted the OVS requirements for use in the SFSP
accordingly.
As mentioned in the background of this proposed rule, these waivers
and extensions of statutory and regulatory requirements pertaining to
OVS were rescinded in 2018. In 2019, 37 State agencies requested a
waiver of programs requirements to allow them to continue utilizing OVS
as had previously been permitted through guidance. State agencies that
submitted OVS waiver requests for program year 2019 cited simplifying
program administration, reductions in food waste, and efficient uses of
program funds to maintain program integrity, to illustrate the
importance of this waiver.
While USDA appreciates the positive benefits of the OVS option, the
Department has some concerns about the effective implementation of OVS
by non-SFA sponsors. Through on-site reviews, USDA has found meal
pattern violations tied to the improper use of the OVS guidelines,
specifically at sites sponsored by non-SFAs. The purpose of OVS is to
decrease administrative burden and food costs while maintaining the
nutritional integrity of meals served to children. In light of these
findings, this rule proposes to retain the requirement that only SFA
sponsors may utilize the OVS option; however, this rule also proposes
to allow SFA sponsors electing to use the SFSP meal pattern to use SFSP
OVS guidelines.
USDA is dedicated to providing effective flexibilities for sponsors
to operate the program efficiently, which maintains program integrity
without impacting the nutritional quality and service of meals provided
to children. Understanding that OVS can be beneficial to sponsor
operations if used properly, USDA is interested in learning more about
the implementation of OVS by non-SFA sponsors, when allowed under a
waiver. Specifically:
What level of training do non-SFA sponsors receive in
order to be able to properly implement OVS?
Do non-SFA sponsors have the resources needed to properly
implement OVS?
What level of technical assistance do non-SFA sponsors
receive?
How would non-SFA sponsors be impacted if OVS were no
longer an available option?
What are the specific benefits to sponsors that use OVS?
Accordingly, this rule proposes to amend Sec. 225.16(f)(1) of the
regulations to clarify meal service requirements for
[[Page 4073]]
SFA sponsors electing to use OVS under the SFSP meal pattern.
VI. Clarification of Program Requirements
A. Reimbursement Claims for Meals Served Away From Approved Locations
As defined in Sec. 225.2, a site is ``a physical location at which
a sponsor provides a food service for children and at which children
consume meals in a supervised setting.'' Meals are reimbursable only
when served at sites that have been approved by the State agency. Site
approval applies only to the specific location that was approved, not
to meals removed from that site for service at another location that
has not been approved. The State agency must approve any changes in
site service time or location after the initial site approval. However,
USDA granted State agencies the flexibility to approve exceptions to
this requirement for the operation of field trips under FNS Instruction
788-13: Sub-Sites in the Summer Food Service Program and policy
guidance, Field Trips in the Summer Food Service Program (SFSP),
February 3, 2003.\5\
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USDA is proposing to amend Sec. 225.6(i), as redesignated through
this rule, and add a new Sec. 225.16(g) to allow sponsors the option
to receive reimbursement for meals served away from the approved site.
In accordance with current guidance, sponsors would be required to
notify the State agency in advance that meals will be served away from
the site, but formal approval of the alternative meal service is not a
requirement. Under these proposed changes, State agencies have the
discretion to set time limits for how far in advance of the field trip
sponsors would send notification to the administering agency. This
procedure is similar to the notification requirements of field trips in
the CACFP, where providers must notify either their sponsoring
organization or the State agency in advance of a planned field trip. If
the State agency is not notified prior to the SFSP field trip, meals
served may be considered ``consumed off-site'' and the State agency has
the discretion to not reimburse those meals. In addition, in order to
operate field trips in the SFSP, the sponsor would have to be capable
of meeting all Program requirements on field trip days, including
applicable State and local health, safety, and sanitation standards, as
determined by the State agency. When considering if sponsors are
eligible to receive reimbursement for meals served away from approved
sites, State agencies should determine that all program requirements,
including all applicable State and local health, safety, and sanitation
standards will be met while traveling and at the field trip meal
service location.
The proposed rule would also require sponsors of open sites to
continue operating at the approved open site location while the field
trip occurs. If this is not possible (for example, if there is limited
staff coverage), the sponsor must notify the community of the change in
meal service and provide information about alternative open sites where
community children can receive free summer meals. Accordingly, the
proposed rule addresses meals served away from the approved site
location during a field trip at redesignated Sec. 225.6(i)(7)(v) and
in a new Sec. 225.16(g).
B. Timeline for Reimbursements to Sponsors
Current regulations in Sec. 225.9(d)(4) require that State
agencies must forward reimbursements to sponsors within 45 calendar
days of receiving a valid claim. The regulations also require that if a
sponsor submits a claim for reimbursement that is incomplete or
invalid, the State agency must return the claim to the sponsor within
30 calendar days with an explanation of the reason for disapproval. If
the sponsor submits a complete revised claim, the State agency must
take final action within 45 calendar days of receipt. These
requirements are necessary to ensure that sponsors receive
reimbursement for meals served in a timely manner.
However, certain circumstances may arise that would require State
agencies to conduct an extended review of a sponsor's claim for
reimbursement to determine if it is incomplete or invalid, and if the
claim should be denied. In recent years, USDA has received numerous
inquiries and waiver requests to extend the timeline for taking final
action on a claim for reimbursement within 45 calendar days of
receiving a revised claim, as required in Sec. 225.9(d)(4), due to
concerns that the sponsor may have engaged in unlawful acts such as
fraud. State agencies have stated that the 45 calendar day timeline to
complete a final action is not sufficient to conduct a thorough review
of all the sponsor's records and make a determination that the claim is
valid.
After notifying the sponsor of disapproval of the claim within 30
calendar days of receipt, the State agency can expand the review and
meal claims validations in order to prevent the potential payment of a
suspected unlawful claim. While Sec. 225.9(d)(10) of the regulations
provides State agencies with the ability to use evidence found in
audits, reviews, or investigations as the basis for nonpayment of a
claim for reimbursement, the State agency may not be able to make this
determination within the given timeframe. Therefore, this rule proposes
to clarify that even if a State agency determines, in accordance with
Sec. 225.9(d)(10), that there is reason to believe the sponsor has
engaged in unlawful acts, the State agency must still return the claim
to the sponsor within 30 calendar days with an explanation of the
reason for disapproval. Additionally, this rule proposes to exempt the
State agency from requirements in Sec. 225.9(d)(4) to take final
action on a claim within 45 calendar days of receipt of a revised claim
if the State agency has reason to believe that the sponsor has engaged
in unlawful acts that would necessitate an expanded review. However,
the State agency must still communicate its findings to the sponsor and
allow the sponsor to submit a revised claim as allowed by Sec.
225.9(d)(4). The State agency must complete final action on the revised
claim once the review has concluded. Once final action is taken, the
State agency must advise the sponsor of its rights to appeal consistent
with the due process provided by the regulations in Sec. 225.13(a).
Accordingly, this rule proposes to amend regulations found in Sec.
225.9(d)(4) to include the clarification that if the claim is
determined to be potentially unlawful based on Sec. 225.9(d)(10), the
State agency must still disapprove the claim within 30 calendar days
with an explanation of the reason for disapproval. This rule also
proposes to amend regulations in Sec. 225.9(d)(10) to clarify that
State agencies may be exempt from the 45 calendar day timeframe for
final action in Sec. 225.9(d)(4) if more time is needed to complete a
thorough examination of the sponsor's claim.
C. Requirements for Media Release
An essential component to the successful operation of the SFSP is
outreach and notification to the community about the availability of
meals. Current regulations at Sec. 225.15(e) require all sponsors
operating the SFSP, including sponsors of open sites, camps, and closed
enrolled sites, to annually announce the availability of free meals in
the media serving the area from which the sponsor draws its attendance.
The regulations specify that media releases issued by sponsors of camps
or closed enrolled sites must include income eligibility standards, a
statement about automatic eligibility to receive free meal benefits at
eligible program
[[Page 4074]]
sites, and a civil rights statement. However, the requirements of each
type of sponsor are not clearly presented, leaving some State agencies
and sponsors to make inadvertent errors in fulfilling requirements.
Additionally, USDA has received questions from State agencies and has
analyzed data from management evaluations that show that the current
requirements are difficult to understand and implement correctly. To
assist sponsors, USDA has issued guidance and resources encouraging
State agencies to complete this requirement on behalf of all sponsors
of open sites in their State through an all-inclusive Statewide media
release (SFSP 07-2014, Expanding Awareness and Access to Summer Meals,
November 12, 2013).
In order to make it easier for SFSP sponsors to satisfy community
notification requirements, USDA is proposing to codify current guidance
allowing State agencies the discretion to issue a media release on
behalf of all sponsors operating SFSP sites, including camps, in the
State. This rule would require State agencies using this option to
ensure that all notification requirements for camps and other sites not
eligible under Sec. 225.2, paragraphs (a) through (c), in the
definition of ``areas in which poor economic conditions exist'' are
met. The proposed changes also clarify that, in the absence of a
Statewide notification, sponsors of camps and other sites not eligible
under Sec. 225.2, paragraphs (a) through (c), in the definition of
``areas in which poor economic conditions exist'' are only required to
notify participants or enrolled children of the availability of free
meals, and do not need to issue a media release to the public at large.
This would limit the sponsor's responsibility to notify only those who
could potentially receive meals at the site. However, sponsors could
still opt to issue public notification of their meal program if they
determine it is appropriate. Finally, the section would be renamed
``Notification to the Community'' to more accurately describe the types
of activities required of sponsors, including sponsors of camps and
closed enrolled sites that will no longer be required to issue a media
release.
Accordingly, this rule proposes to amend Sec. 225.15(e) by
renaming the subsection ``Notification to the Community,'' specifying
that State agencies may issue a media release on behalf of all sponsors
operating open SFSP sites in the State, and clarifying that sponsors of
camps and other sites not eligible under the definition of ``areas in
which poor economic conditions exist'' must only notify participants or
enrolled children of the availability of free meals.
D. Annual Verification of Tax-Exempt Status
In order to be eligible to participate in the SFSP, sponsors must
maintain their nonprofit status (Sec. Sec. 225.2 and 225.14(b)(5)). In
2011, the Internal Revenue Service changed its filing requirements for
some tax-exempt organizations. Failure to comply with these
requirements could result in the automatic revocation of an
organization's tax-exempt status. Due to this change, USDA released
guidance for confirming sponsors' tax-exempt status, which requires
that State agencies annually review a sponsor's tax-exempt status (SFSP
04-2017, Automatic Revocation of Tax-Exempt Status--Revised, December
1, 2016). Accordingly, this rule proposes to codify the requirement for
annual confirmation of tax-exempt status at the time of application by
amending Sec. 225.14(b)(5).
VII. Important Definitions in the SFSP
A. Self-Preparation Versus Vended Sites
Current regulations in Sec. 225.2 define the terms ``self-
preparation sponsor'' and ``vended sponsor.'' These definitions are
critical to the proper administration of the SFSP because reimbursement
rates are determined, in part, based on the sponsor's classification as
either self-preparation or vended. Per statutory requirements,
reimbursement rates are calculated using operating and administrative
costs (42 U.S.C. 1761(b)(1) and 42 U.S.C. 1761(b)(3)) to determine a
reimbursement rate for each meal served. Rates are higher for sponsors
of sites located in rural areas and for ``self-preparation'' sponsors
that prepare their own meals at sites or at a central facility instead
of purchasing from vendors. This is due to the higher administrative
costs associated with program operation in rural areas and preparing
meals rather than contracting with a food service management company.
Therefore, correct classification of self-preparation or vended
sponsors is necessary for proper program management and maintaining the
fiscal integrity of the program.
In recent years, advances in technology have allowed State agencies
and sponsors to develop increasingly sophisticated reporting systems
that are capable of collecting detailed information on the number and
type of meals being served. Some State agencies have systems that allow
sponsors to report the number and type of meals served at each site,
rather than aggregating and reporting this information at the sponsor
level, which is the current requirement. Accordingly, some State
agencies have developed the ability to classify individual sites as
self-preparation or vended sites, rather than classifying a sponsor and
all of its sites as one type or the other. USDA is aware that some
State agencies that have these capabilities also provide reimbursements
based on the classification of the individual sites. For example, if a
sponsor operates some sites as self-preparation and some sites as
vended, the State agency provides a mix of reimbursements. This is
significant because individual sponsors may support a range of sites,
including sites self-preparing meals, sites utilizing a vendor contract
to receive meals, or sites that use both methods of obtaining meals
(e.g., offering a self-prepared breakfast and a vended lunch).
Providing reimbursements to sponsors that operate a mix of sites based
on the individual site classification is more accurate and helps
protect the integrity of the SFSP.
In recognition of the advances being made at the State agency and
local level, this rule proposes to add definitions for ``self-
preparation site'' and ``vended site,'' and to require that sponsors
and sites include in their application to participate in the SFSP
information about how meals will be obtained for each site. While
adding these definitions is an important first step, USDA is interested
in learning more about current data collection practices. At this time,
USDA does not have information on how many State agencies are capable
of collecting meal claim information at the site level, how many State
agencies currently collect information at the site level, how many
State agencies provide reimbursement based on the individual site
classification, and the potential impact of this practice on claiming
and monitoring. To better understand the current state of claiming
systems nationwide and the implications for policy development,
including potential changes to regulatory requirements, USDA is
gathering more information by soliciting specific feedback on this
issue. Therefore, this proposed rule is requesting comments on the
following questions:
How many State agencies have systems that are capable of
receiving claims at the site level? Are any State agencies currently
receiving claims at the site level and providing reimbursement based on
the individual site classification?
[[Page 4075]]
What are the costs and benefits of implementing systems
that can receive claims at the site level?
How common or uncommon is it for a site to use two
different methods of obtaining meals (e.g., offering a self-prepared
breakfast and a vended lunch)?
Do any State agencies have systems that are able to
account for different methods of obtaining meals within the same site?
What would be the impact on claiming and monitoring of
collecting and paying claims at the site level?
Accordingly, this rule proposes to add definitions to Sec. 225.2
for ``self-preparation site'' (i.e., a site which prepares the majority
of meals that will be served at its site and does not contract with a
food service management company for unitized meals, with or without
milk, or for management services) and ``vended site'' (i.e., a site
which serves unitized meals, with or without milk, from a food service
management company). In addition, this rule proposes to amend
Sec. Sec. 225.6(c)(2)(viii) and 225.6(c)(3)(v) to require a summary of
how meals will be obtained at each site as part of the sponsor
application.
B. Eligibility for Closed Enrolled Sites
The current definition of closed enrolled sites included in Sec.
225.2 requires that at least 50 percent of the enrolled children at the
site are eligible for free or reduced-price meals under the NSLP and
the SBP, as determined by approval of applications in accordance with
Sec. 225.15(f). This section outlines the requirement to use income
eligibility forms to ``determine the eligibility of children attending
camps and the eligibility of sites that are not open sites as defined
in paragraph (a) of the definition of `areas in which poor economic
conditions exist' in Sec. 225.2''. To reduce administrative burden on
sponsors, USDA published guidance in 2002 that permitted closed
enrolled sites to establish eligibility based on data of children
eligible for free and reduced priced meals in the area where the site
was located (Summer Food Service Program (SFSP) Waiver for Closed
Enrolled Sites, November 17, 2002 \6\). After over 15 years of
implementing this waiver, this flexibility has been shown to reduce
administrative burden on sponsors of closed enrolled sites and
eliminate barriers to participation for children and families enrolled
at these sites. State agency waiver requests for Program year 2019
confirm that these remain the principal benefits of permitting closed
enrolled cites to rely on area eligibility rather than applications.
Requests from 36 out of 40 State agencies noted that the reduction in
administrative costs can be more productively invested in technical
assistance and oversight to improve the quality of services provided to
participants and strengthen program integrity. Further, the Healthy,
Hunger-Free Kids Act of 2010, Public Law 111-296, amended the
definition of ``areas in which poor economic conditions exist'' in the
NSLA. This revised definition allows for enrolled sites to demonstrate
eligibility through ``other means approved by the Secretary.''
---------------------------------------------------------------------------
\6\ No longer available.
---------------------------------------------------------------------------
Accordingly, this proposed rule would amend the definitions of
``areas in which poor economic conditions exist'' and ``closed enrolled
site'' in Sec. 225.2 to clarify eligibility requirements and include
eligibility determination based on area data of children eligible for
free and reduced-price meals. This proposed rule would also update
redesignated Sec. Sec. 225.6(g)(1)(ix) and 225.6(g)(2)(iii) to
establish the frequency at which the site must re-establish
eligibility, if based on area data. This rule would make a technical
correction to Sec. 225.15(f) to reflect changes made to the definition
of ``areas in which poor economic conditions exist.''
C. Roles and Responsibilities of Site Supervisors
Currently, SFSP regulations do not have a singular definition
outlining the roles and responsibilities of site supervisors. USDA does
publish guidance specifically for site supervisors as a tool to
facilitate program operations that are consistent with regulations. The
role of the site supervisor is critically important to proper
management of the SFSP. USDA has determined that clearly defining the
role of the site supervisor, including requiring that the site
supervisor must be on site during the meal service, would help sponsors
comply with program requirements and improve program integrity.
Accordingly, this rule proposes to add the following definition in
Sec. 225.2 for ``site supervisor:'' the individual on site for the
duration of the meal service, who has been trained by the sponsor, and
is responsible for all administrative and management activities at a
site including but not limited to: ordering meals, maintaining
documentation of meal deliveries, ensuring that all meals served are
safe, and maintaining accurate point of service meal counts.
D. Unaffiliated Sites
In the SFSP, many sponsors operate sites with which they have a
legal affiliation. However, there are instances when a sponsor will
provide meals to a site with which it has no legal affiliation other
than an agreement to conduct a meal service. Section IV. C of this rule
proposes to include this type of situation as a characteristic that
should be taken into consideration when determining which sites a State
agency should choose to review during a sponsor review in order to
fulfill requirements set forth in Sec. 225.7(e)(4)(v). The current
regulations under Sec. 225.2 do not include a definition for
``unaffiliated site.'' Therefore, this rule would add a definition for
``unaffiliated site'' to help State agencies determine which sites
should be selected for review when conducting a sponsor review.
Accordingly, this rule proposes to add the following definition in
Sec. 225.2 for ``unaffiliated site:'' a site that is legally distinct
from the sponsor.
E. Unanticipated School Closure
The NSLA allows service institutions to provide meal services to
children who are not in school for a period during the months of
October through April due to a natural disaster, building repair, court
order, or similar cause. The statute further requires that the meal
service must take place at non-school sites. The service of meals
during these unanticipated school closures makes the SFSP a critical
piece of the food safety net, especially in disaster situations. While
the regulations currently provide requirements for approving sponsors
to serve during unanticipated school closures, there is not a specific
regulatory definition of unanticipated school closure. This rule
proposes to add a definition of ``unanticipated school closure'' that
aligns with statutory requirements outlined in section 13(c)(1) of the
NSLA, 42 U.S.C. 1761(c)(1), and existing regulatory provisions related
to unanticipated school closures. Including this definition would also
allow regulatory text to be streamlined and remove duplicative and
repetitive references throughout the regulations. Accordingly, this
rule proposes to add a definition in Sec. 225.2 for ``unanticipated
school closure'' and revise all references to unanticipated school
closures.
F. Nonprofit Food Service, Nonprofit Food Service Account, Net Cash
Resources
Financial management in the SFSP is critical to the success of the
Program, especially considering the short duration during which most
summer programs operate. As such, it is
[[Page 4076]]
important that key terms related to financial management are clearly
defined. To create consistency across Child Nutrition Programs, this
rule proposes to include definitions of ``nonprofit food service,''
``nonprofit food service account,'' and ``net cash resources'' that
would align with the terms already defined under the NSLP in 7 CFR
210.2. Accordingly, this rule proposes to add definitions in Sec.
225.2 for ``nonprofit food service,'' ``nonprofit food service
account,'' and ``net cash resources.''
VIII. Miscellaneous
This rule proposes four other miscellaneous provisions that will
help clarify program requirements.
A. Authority To Waive Statute and Regulations
Section 12(l) of the NSLA, 42 U.S.C 1760(l), provides the Secretary
with the authority to waive statutory requirements under the NSLA or
the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) and any
regulations issued under either Act for State agencies and eligible
service providers if certain conditions are met. The Secretary may only
approve requests that facilitate the ability of the State agency or
eligible service provider to carry out the purpose of the program and
that do not increase the overall cost of the Federal Government
program. The Secretary does not have the authority to waive certain
requirements including, but not limited to, the nutritional content of
the meals served, Federal reimbursement rates, or the enforcement of
any statutory right of any individual. USDA has issued guidance on the
process for requesting a waiver and data reporting requirements for
approved waivers (SFSP 05-2018, Child Nutrition Program Waiver Request
Guidance and Protocol--Revised, May 24, 2018).
USDA routinely works with State agencies to determine when and how
waiver authority can best be applied to improve program operations. In
1996, USDA issued technical assistance that outlined the
responsibilities of State agencies, especially when submitting a waiver
request on behalf of eligible service providers. The State agency
should act as both a facilitator and a collaborator, and as such, is
expected to provide technical assistance to eligible service providers
requesting a waiver. As State agencies have the ability to best assess
sponsor operations and capability, State agencies should review waiver
requests from eligible service providers and determine whether the
requesting sponsor has the capacity to implement the waiver. This
includes the eligible service provider's ability to maintain a high
level of program integrity and to capture data on the impacts of the
waiver. State input on the capabilities of the eligible service
provider are critical to helping USDA make a determination about
whether an approval of the waiver would benefit the program. USDA is
not in a position to evaluate a sponsor's capability to implement a
waiver while maintaining program integrity, and relies upon a State
agency's assessment of the sponsor's ability to do so. This rule
proposes to address this responsibility in regulatory text.
Further, State agencies are responsible for monitoring sponsor
activities, including the implementation of waivers. State agencies and
sponsors must work together in partnership to ensure that all
monitoring requirements are met. The approval of a waiver of certain
statutory or regulatory requirements does not alleviate the State
agency or the eligible service provider of the responsibility to
properly monitor program operations. If a State agency sends forward a
waiver request, whether Statewide or for individual service providers,
the State agency is agreeing that it can and will fulfill all other
regulatory requirements, including monitoring and oversight.
Additionally, by submitting a request, the State agency attests that
the request meets all requirements for waiver requests outlined in
section 12(l) of the NSLA.
Under the proposed changes in this rule, the State agency would
also have the discretion to deny a waiver submitted by an eligible
service provider. There are many reasons why a State agency may choose
to deny a request from an eligible service provider. For example, if
the request does not meet the criteria for approvable requests outlined
in section 12(l) of the NSLA, the State agency should deny the request
or work with the eligible service provider to ensure that all statutory
requirements are met. Additionally, as mentioned previously in this
section, the State agency plays an important role in evaluating and
monitoring sponsor operations. The State agency could deny the request
of a sponsor if the State agency does not have confidence that the
sponsor has the capability to implement the waiver while maintaining a
high level of program integrity. Further, if the State agency or the
sponsor does not have the resources to properly implement, monitor, and
evaluate the impacts of the waiver, the State agency could deny the
request.
To ensure the waiver process is efficient and upholds a high level
of program integrity, USDA is seeking comments on the process of
requesting a waiver, monitoring implementation of the waiver, and
reporting data on waivers issued through this authority.
Although regulations are not needed to continue implementing
regulatory waivers, this rule proposes to clarify that USDA has the
authority to issue waivers of statutory and regulatory requirements for
all Child Nutrition Programs. Accordingly, this rule proposes to add
the following new paragraphs to codify USDA's authority to waive
statutory and regulatory requirements for all Child Nutrition Programs:
Sec. 210.3(d);
Sec. 215.3(e);
Sec. 220.3(d);
Sec. 225.3(d); and
Sec. 226.3(e).
B. Duration of Eligibility
Statutory requirements found in the NSLA at 42 U.S.C.
1761(a)(1)(A)(i)(I-II) authorize the use of school data and census data
to establish area eligibility in the SFSP. The NSLA also establishes
that area eligibility determinations made using school or census data
must be redetermined every five years. This rule proposes to amend the
duration of eligibility for open sites and restricted open sites based
on school and census data from three years to five years, in accordance
with the NSLA. Accordingly, this rule proposes to change the
regulations in redesignated Sec. Sec. 225.6(g)(1)(ix) and
225.6(g)(2)(iii) to require submission of eligibility documentation
every five years.
C. Methods of Providing Training
As technology has advanced, sponsors and State agencies have the
capability to provide mandatory trainings via the internet. Having a
variety of training opportunities and formats can accommodate varying
sponsor needs, while at the same time minimizing the time and expense
incurred by the State agency. Accordingly, this rule proposes to amend
regulations in Sec. 225.7(a) to include the option for training to be
conducted via the internet.
D. Meal Quality Facility Reviews
Current regulations require that part of any review of a vended
sponsor must include a food service management company facility visit.
Through management evaluations and technical assistance, USDA has
learned that this requirement is unclear and places undue burden on
State agencies. The purpose of the food service management company
facility visit is to verify that meals being served are prepared,
stored, and transported in such a manner that
[[Page 4077]]
complies with local health and safety standards. In order to clarify
review requirements, this rule proposes to rename the section title
from ``Food Service Management Company Visits'' in current Sec.
225.7(d)(6) to ``Meal Quality Facility Review,'' to clarify that each
facility should be reviewed at least one time during the program year,
and redesignate as Sec. 225.7(i).
Procedural Matters
Executive Order 12866 and 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 determined to be significant
and was reviewed by the Office of Management and Budget (OMB) in
conformance with Executive Order 12866.
Regulatory Impact Analysis
Economic Summary for ``Strengthening Integrity in the Summer Food
Service Program'' Proposed Rule
As described in the preamble to the proposed rule, changes made by
the proposed rule ``update important definitions, simplify the
application process, enhance monitoring requirements, and provide more
discretion at the State agency level to manage program operations.''
The proposed rule codifies in regulation a number of waivers and
policy guidance currently in place to ``streamlin[e] and clarify
program requirements.''
Although not currently in regulation, a majority of the proposed
changes have already been implemented in the operation of the SFSP
through policy guidance and remain in effect. Other proposed changes
were previously implemented through policy guidance, but were rescinded
in October 2018. These rescinded policies are currently in effect
through approved individual State waivers. The proposed changes that
have already been implemented in the operation of the SFSP through
policy guidance or waivers are as follows:
1. Streamlining Program Requirements
a. Application Procedures for New Sponsors \7\
---------------------------------------------------------------------------
\7\ Although this flexibility is currently implemented in policy
guidance (and therefore we do not estimate a separate savings for
this provision), we note that this provision provides most of the
burden hour savings as detailed in the ICR table on p. 76-77.
---------------------------------------------------------------------------
b. Demonstration of Financial and Administrative Capability
2. Facilitating Compliance with Program Monitoring Requirements
a. Establishing the Initial Maximum Approved Level of Meals for
Sites of Vended Sponsors
3. Providing a Customer-Service Friendly Meal Service
a. Meal Service Times
b. Off-site Consumption of Food Items
c. Offer versus Serve \8\
---------------------------------------------------------------------------
\8\ As mentioned in the background of the proposed rule, the
waivers and guidance that allowed non-SFA sponsors to implement
offer versus serve were rescinded in 2018, effective for the 2019
summer meals program. The proposed rule keeps the requirement that
only SFA providers may use offer versus serve; therefore, we
estimate no change in costs or burden due to this provision, since
it reflects existing requirements.
---------------------------------------------------------------------------
4. Clarification of Program Requirements
a. Annual Verification of Tax-Exempt Status
5. Important Definitions in the SFSP
a. Eligibility for Closed Enrolled Sites
b. Unanticipated School Closure
6. Miscellaneous
a. Authority to Waive Statute and Regulations
Since the above changes are currently in effect in program
operations through policy guidance or State waivers, we estimate no
change in participation, meal costs, or costs to State agencies,
sponsors, or sites, beyond the savings generated by the decreased
burden needed to fulfill program requirements under the proposed
changes.
A table with all of the burden changes as outlined in the ICR is
available in this document.
The proposed changes that are not currently implemented in program
operations through policy guidance are as follows (each proposed change
includes a description of the expected impact to the program, and an
explanation for why we do not estimate additional costs associated with
the proposed changes):
1. Streamlining Program Requirements
a. Clarifying Performance Standards for Evaluating Sponsor Viability,
Capability, and Accountability
i. Program Impact: This rule proposes to add performance standards
for organizations applying to participate as SFSP sponsors that
correspond to standards currently in place at Sec. 226.6 for
organizations applying to participate as CACFP sponsoring
organizations, in response to State agency requests regarding
application requirements, and in an effort to streamline requirements
across programs. These detailed performance standards under Sec. 226.6
assist State agencies in assessing an applicant's financial viability
and financial management, administrative capability, and
accountability.
ii. Cost Impact: USDA recognizes that including these detailed
performance standards in the management plan may require some State
agencies and sponsors to modify current practices. Although USDA
prioritizes flexibility for stakeholders to the greatest extent
possible, these changes would bolster program integrity by supporting
the ability of State agencies to more efficiently and consistently
evaluate an applicant sponsor's financial and administrative
capability. However, we do not estimate any cost or participation
effects. It is possible that adopting these performance standards could
generate program efficiencies and potential savings in the long-term,
as applicants to sponsor the Program must demonstrate their ability to
meet the performance standards for financial viability, administrative
capability, and Program accountability to be able to operate the
program. Cost impacts would be difficult to quantify because any
savings directly tied to the performance standards would be challenging
to isolate.
2. Clarification of Program Requirements
a. Reimbursement Claims for Meals Served Away From Approved Locations
i. Program Impact: SFSP meals are reimbursable only at approved
sites. Via policy guidance, USDA granted State agencies the flexibility
to approve exceptions to this requirement for the operation of field
trips. This rule proposes to clarify the regulatory requirements that
if an SFSP sponsor wishes to serve a meal away from the approved site
location, they are required to notify the State agency, but formal
approval of the alternative meal service is not a requirement.
ii. Cost Impact: This provision may reduce the burden on both State
agencies and sponsors, if State agencies had interpreted previous
guidance to mean that State agencies had to formally approve field
trips, instead of simply receiving notification of the field trip.
According to an internal USDA analysis, 76 percent of sponsors and 63
percent of sites reported serving program meals during off-site field
trips at some point
[[Page 4078]]
in time during the summer.\9\ However, estimating any potential burden
reduction is difficult because prior policy guidance on State approval
for serving meals at an alternate location may have been inconsistently
applied. As a result, this provision would provide a minimal reduction
in burden for some States (i.e., States that currently allow for
service of field trip meals with just a notice to the State agency) and
a larger impact for States that use a formal approval process. This
provision is providing clarity on the requirement currently provided
through policy guidance.
---------------------------------------------------------------------------
\9\ 2015 USDA internal SFSP study. (In 2015, USDA collected
information about SFSP operations, sponsors, and sites through a
nationally representative survey administered to State agencies,
SFSP sponsors, and SFSP sites.)
---------------------------------------------------------------------------
b. Timeline for Reimbursements to Sponsors
i. Program Impact: This provision clarifies a point of confusion
for State agencies not addressed in current regulation. The proposed
rule would state that if a sponsor's claim is determined to be
potentially unlawful based on Sec. 225.9(d)(10), the State agency must
still disapprove the claim within 30 calendar days with an explanation
of the reason for disapproval. This rule also proposes to amend
regulations in Sec. 225.9(d)(10) to clarify that State agencies may be
exempt from the 45 calendar day timeframe for final action in Sec.
225.9(d)(4) if more time is needed to complete a thorough examination
of the sponsor's claim.
ii. Cost Impact: We estimate no change in cost associated with this
provision.
c. Requirements for Media Release
i. Program Impact: Current regulations at Sec. 225.15(e) outline
the requirement for each sponsor operating the SFSP to annually
announce the availability of free meals in the media serving the area
from which it draws its attendance, but the current requirements are
not clear about what is required to be included in the release and,
therefore, cause significant confusion. The changes clarify that
sponsors of camps and other sites not eligible under the definition of
``areas in which poor economic conditions exist'' must only notify
participants or enrolled children of the availability of free meals.
This rule also proposes to include a flexibility that provides State
agencies the discretion to issue a media release for all sponsors
operating SFSP sites in the State, as long as the notification meets
the requirements outlined in the provision.
ii. Cost Impact: We estimate no change in cost associated with this
provision. It should be noted that this requirement will likely result
in a burden reduction, especially for sponsors of closed sites, such as
camps, and potentially on all sponsors in a State, if the State agency
issues a compliant statewide notification.
3. Facilitating Compliance With Program Monitoring Requirements
a. First Week Site Visits
i. Program Impact: Existing regulatory requirements state that
sponsors are required to visit each of their sites at least once during
the first week of operation under the program and must promptly take
such actions as are necessary to correct any deficiencies. Although
USDA had previously waived some of these requirements, these waivers
were rescinded in 2018. This proposed rule would create a tiered
framework, under which sponsors responsible for the management of 10 or
fewer sites would be required to conduct the first site monitoring
visit within the first week (seven calendar days) after the site begins
program operations. Sponsors responsible for the management of more
than 10 sites would be required to conduct the first site monitoring
visits within the first two weeks (14 calendar days) after the site
begins program operations. In cases where a site operates for one week
or less, the site visit must be conducted during the period of
operation. Based on currently available data from studies conducted by
USDA and collected from State agencies, over 80 percent of sponsors
participating in the program operate 10 sites or fewer. While this
change would not impact the majority of sponsors, this flexibility in
the timeline during which the first monitoring visit must take place
would help alleviate logistical burdens for larger sponsors while
maintaining strong monitoring practices.
ii. Cost Impact: We estimate minimal change in costs due to this
provision. This provision will not affect the regulatory and statutory
requirements for most providers, and it provides additional flexibility
to the sponsors it does affect. Therefore, this provision may create
cost savings for some sponsors with more than 10 sites (in 2015, 18.4
percent of sponsors had more than 10 sites),\10\ though we are not able
to estimate any possible savings.
---------------------------------------------------------------------------
\10\ 2015 USDA internal SFSP study.
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b. Statistical Monitoring Procedures, Site Selection, and Meal Claim
Validation for Site Reviews
i. Program Impact: In order to provide flexibility to State
agencies conducting sponsor and site reviews, current regulations at
Sec. 225.7(d)(8) provide State agencies with the flexibility to use
statistical monitoring procedures in lieu of the site monitoring
requirements found in Sec. 225.7(d)(2). However, USDA regulations and
guidance do not provide clear instructions for how to develop
statistical monitoring procedures. After significant research and
feedback from State agencies obtained through various workgroups, USDA
has determined that any measure or formula that would be statistically
significant and thus provide adequate monitoring of site meal claim
forms is not feasible. Accordingly, USDA is proposing to remove the
provision at Sec. 225.7(d)(8) allowing the use of statistical
monitoring during site reviews and validation of meal claims.
Additionally, this rule proposes to codify a method for conducting meal
claim validations. The Department recognizes that the guidance for
conducting 100 percent meal claim validations may be burdensome for
some State agencies. Therefore, this rule proposes a stepped increase
for meal claim validations (e.g., if the State agency reviews 10
percent of a sponsor's sites and finds a 5 percent or greater error
rate, the State agency must take fiscal action and expand the meal
validation review to 25 percent of the sponsor's sites; if a 5 percent
or greater error rate is found, the State agency must then review 50
percent of the sponsor's sites; and if a 5 percent or greater rate
continues to be found, then the State agency must review 100 percent of
a sponsor's sites). This incremental approach will use State agency
resources more efficiently and provide State agencies a more targeted
method for review.
ii. Cost Impact: These changes remove an unused option for site
monitoring (statistical monitoring procedures) and increase State
flexibility in how to conduct meal validation reviews. Although it is
likely these flexibilities will generate some savings for State
agencies, the impacts are not included as potential savings in our
savings estimates for this rule because USDA lacks sufficient
information to develop sound estimates. This provision impacts sponsors
with more than one site (in 2015, 57 percent of sponsors had one site,
while 43 percent of sponsors had more than one site).\11\ The impact of
the
[[Page 4079]]
proposed meal claim validation process would depend on the average
error rate, which determines how many claims the State will ultimately
review. USDA does not know the distribution of meal claim error rates
in SFSP and cannot estimate how many fewer claims would be reviewed
under this proposed rule.
---------------------------------------------------------------------------
\11\ 2015 USDA internal SFSP study.
---------------------------------------------------------------------------
4. Important Definitions in the SFSP
a. Self-Preparation Versus Vended Sites
i. Program Impact: As sponsor sophistication and technology have
developed, the operation of SFSP has shifted. State agencies have
systems that allow for site based claiming, which provides more
granular information about the number and types of meals being served
at individual sites, rather than aggregating this information at the
sponsor level. Additionally, as sponsors have grown, many used a mixed
model of sponsorship, with some sites self-preparing meals and others
utilizing a vendor contract to receive meals. In light of these
changes, State agencies have the ability to classify sites as self-
preparation or vended sites, rather than sponsors. As such, the
regulations require updates that reflect the current nature of program
operations. Accordingly, this rule proposes to add definitions to Sec.
225.2 for ``self-preparation site'' and ``vended site''. Additionally,
this rule proposes to clarify requirements at Sec. 225.6(c)(2) to
require a summary of how meals will be obtained at each site as part of
the sponsor application.
ii. Cost Impact: We estimate no change in cost associated with this
provision. This proposed change merely updates program definitions to
align with the current nature of program operations.
b. Roles and Responsibilities of Site Supervisors
i. Program Impact: Currently, SFSP regulations do not have a
singular definition outlining the roles and responsibilities of site
supervisors. USDA does publish guidance specifically for site
supervisors as a tool to facilitate program operations that are in
compliance with regulations. The role of the site supervisor is
critically important to proper management of the SFSP. Using a variety
of methods (including nationwide studies conducted by the department),
USDA has received the feedback that clearly defining the role of the
site supervisor, including requiring that the site supervisor must be
on site during the meal service, would greatly facilitate sponsors'
ability to comply with requirements and improve program integrity.
Accordingly, this rule proposes to add a definition at Sec. 225.2 for
site supervisor, which outlines the role and responsibilities required
of a site supervisor.
ii. Cost Impact: We estimate no change in cost associated with this
provision. This proposed change merely updates program definitions to
align with the current nature of program operations.
c. Unaffiliated Sites
i. Program Impact: In the SFSP, many sponsors operate sites with
which they have a legal affiliation. However, there are instances when
a sponsor will provide meals to a site with which it has no legal
affiliation other than an agreement to conduct a meal service. Section
IV. C of this rule proposes to include this type of situation as a
characteristic that should be taken into consideration when determining
which sites a State agency should choose to review during a sponsor
review in order to fulfill requirements set forth in Sec.
225.7(e)(4)(v). The current regulations under Sec. 225.2 do not
include a definition for unaffiliated site. Therefore, this rule would
add a definition for unaffiliated site to help State agencies determine
which sites should be selected for review when conducting a sponsor
review.
ii. Cost Impact: We estimate no change in cost associated with this
provision. This proposed change merely updates program definitions to
align with the current nature of program operations.
d. Nonprofit Food Service, Nonprofit Food Service Account, Net Cash
Resources
i. Program Impact: Financial management in the SFSP is critical to
the success of the program, especially considering the short duration
during which most summer programs operate. As such, it is important
that key terms related to financial management are clearly defined. To
create consistency across Child Nutrition Programs, this rule proposes
to include definitions of nonprofit food service, nonprofit food
service account, and net cash resources that would align with the terms
already defined under the National School Lunch Program in part 210.
ii. Cost Impact: We estimate no change in cost associated with this
provision. This would just ensure consistency across the SFSP and NSLP.
5. Miscellaneous
a. Duration of Eligibility: Decreases Burden for Sites and Sponsors
Using Area Eligibility and Aligns SFSP Regulations With NSLP
Regulations
i. Program Impact: Statutory requirements found in the NSLA at 42
U.S.C. 1761(a)(1)(A)(i)(I-II) authorize the use of school data and
census data to establish area eligibility in the SFSP. The NSLA also
establishes that area eligibility determinations made using school or
census data must be redetermined every five years. This rule proposes
to amend the duration of eligibility for open sites and restricted open
sites for school and census data from three years to five years, in
accordance with the NSLA. Accordingly, this rule proposes to change the
regulations in redesignated Sec. Sec. 225.6(g)(1)(ix) and
225.6(g)(2)(iii) to require submission of eligibility documentation
every five years.
ii. Cost Impact: We estimate no change in cost associated with this
provision. The proposed change will decrease the burden on sponsors
using school or census data for area eligibility determinations of
sites. We are not able to estimate any potential participation effects,
but we note that there is very little annual variation in the census
data, so any participation or eligibility effects are likely to be
minimal.
b. Methods of Providing Training
i. Program Impact: As technology has advanced, sponsors and State
agencies have the capability to provide mandatory trainings via the
internet. Accordingly, this rule proposes to update regulations at
Sec. 225.7(a) to include the option for training to be conducted via
the internet.
ii. Cost Impact: The proposed change may decrease training costs
for State agencies and sponsors who switch from in-person trainings to
online trainings, though we are not able to estimate this potential
savings.
c. Food Service Management Company Facility Visits
i. Program Impact: Current regulations require that part of any
review of a vended sponsor must include a food service management
company facility visit. In order to clarify review requirements, this
rule proposes to rename the section titled `Food Service Management
Company Visits' in current Sec. 225.7(d)(6) to `Meal Quality Facility
Review.' This rule would also reorganize the requirements in a more
logical manner and amend to clarify that each facility should be
reviewed at least
[[Page 4080]]
one time during the program year, and redesignate as Sec. 225.7(i).
ii. Cost Impact: We estimate no change in cost associated with this
provision. The proposed change clarifies current requirements; it makes
no changes to current requirements.
We estimate that these new changes will not impact participation,
meal costs, or costs to State agencies, sponsors, or sites, beyond
accounting for the decreased burden needed to fulfill program
requirements under the proposed changes, as the proposed changes
streamline and/or decrease administrative requirements, increase
flexibilities for State agencies and/or sponsors, and/or provide
clarity where current program requirements are currently unclear.
More generally, this action streamlines SFSP operations for both
State agencies and program operators. It codifies policies that have
proven effective in improving efficiencies in the operation of the
SFSP. These flexibilities have provided significant relief from some
program administrative burdens and have reduced paperwork for those
sponsors experienced in other Child Nutrition Programs that wish to
become SFSP operators. These waivers and flexibilities have also proven
to improve compliance with program regulations. We estimate that there
are no increased costs to State agencies or SFSP operators and no
Federal costs associated with implementation of this rule.
There may be some savings associated with this rule due to the
reduction in burden associated with streamlining operations and
reducing SFSP paperwork for experienced sponsors. Depending on the
position of the staff person submitting the paperwork, this action is
estimated to save approximately $0.13 million annually if performed by
an administrative-level position, or about $0.23 million annually if
performed by a director-level position. This would result in
approximately $0.7 million to $1.2 million in savings over five years,
depending on the position level of the person submitting the
paperwork.\12\
---------------------------------------------------------------------------
\12\ These ranges were calculated by taking the hourly total
compensation from BLS for FY2017 (for all State and Local workers
for the director-level position estimate, and for a private
administrative assistant for the administrative-level estimate) and
inflating that hourly total compensation figure according to the ECI
wage increase in OMB's economic assumptions for the President's
Budget for years FY2018-FY2022. That hourly compensation figure was
then multiplied by the decrease in burden hours as estimated in the
ICR to generate the yearly and 5-year savings estimate.
---------------------------------------------------------------------------
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, the
Secretary certifies that this rule would not have a significant impact
on a substantial number of small entities. The totality of the proposed
changes aim to decrease overall burden on the affected parties, which
include the small entities covered by the proposed rule (i.e., small
sponsors and sites). However, the majority of the proposed provisions
are currently in effect via policy guidance or State waivers. In
addition, changes that would affect burden primarily impact State
agencies and larger sponsors, such as the requirement that State
agencies share information, the flexibility on first monitoring visits
for sponsors with more than ten sites, and the multi-step approach for
States conducting claim validations.
Executive Order 13771
Executive Order 13771 directs agencies to reduce regulation and
control regulatory costs and provides that the cost of planned
regulations be prudently managed and controlled through a budgeting
process. If finalized as proposed, this rule would be an Executive
Order 13771 deregulatory action. This rule codifies flexibilities that
were previously extended via policy guidance. We estimate that this
rule, if finalized as proposed, will save the affected parties at least
$0.13-$0.23 million annually, or at least $0.7-$1.2 million over the
next five years.
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, USDA
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 $146 million or more (when
adjusted for inflation; GDP deflator source: Table 1.1.9 at http://www.bea.gov/iTable) in any one year. When such a statement is needed
for a rule, section 205 of the UMRA generally requires USDA 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) for
State, local and tribal governments or the private sector of $146
million or more in any one year. Thus, the rule is not subject to the
requirements of sections 202 and 205 of the UMRA.
Executive Order 12372
SFSP is listed in the Assistance Listings under the Catalog of
Federal Domestic Assistance Number 10.559 and is subject to Executive
Order 12372, which requires intergovernmental consultation with State
and local officials (see 2 CFR chapter IV).
Federalism Summary Impact Statement
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 and either impose
substantial direct compliance costs on State and local governments or
preempt State law, 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 13132. USDA has determined that
this rule does not have Federalism implications. This rule does not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
nor does it impose substantial or direct compliance costs on State and
local governments. Therefore, under section 6(b) of the Executive
Order, a Federalism summary impact statement is not required.
Executive Order 12988, Civil Justice Reform
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not 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.
Civil Rights Impact Analysis
FNS has reviewed this proposed rule in accordance with USDA
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify any
major civil rights impacts the rule might have on program participants
on the basis of age, race,
[[Page 4081]]
color, national origin, sex or disability. After a careful review of
the rule's intent and provisions, FNS has determined that this rule is
not expected to affect the participation of protected individuals in
the SFSP.
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. Additionally, other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, the relationship between the Federal Government and
Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes also require
consultation. This regulation has possible Tribal implications, so
consultation is required. FNS will seek consultation on this rule prior
to implementing a final rule. If further consultation is requested, the
Office of Tribal Relations (OTR) will work with FNS to ensure quality
consultation is provided.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR
1320) requires that the OMB approve all collections of information by a
Federal agency 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.
In accordance with the Paperwork Reduction Act of 1995, this
proposed rule is revising existing information collection requirements
which are subject to review and approval by OMB. These existing
requirements are currently approved under OMB Control Number 0584-0280
7 CFR part 225, SFSP. The proposals outlined in this rule are expected
to reduce the burden for some of the information requirements approved
in that collection.
Comments on this proposed rule and changes in the information
collection burden must be received by March 23, 2020.
Send comments to the Office of Information and Regulatory Affairs,
OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Comments
are invited on: (a) Whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information shall have practical utility; (b) the
accuracy of the agency's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumptions used; (c) ways to enhance the quality, utility, and
clarity of the information to be collected; and (d) 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 notice 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 225, Streamlining Program Requirements and
Improving Integrity in the Summer Food Service Program.
OMB Control Number: 0584-0280.
Expiration Date: 12/31/2022.
Type of Request: Revision.
Abstract: This is a revision of requirements in the information
collection under OMB Control Number 0584-0280 that are being impacted
by this rulemaking. USDA proposes to modify regulatory requirements for
sponsors and State agencies in the SFSP to streamline program
requirements for participation. This proposed rule impacts information
reporting at the sponsor level, monitoring requirements for State
agencies, and public disclosure.
Under this rule, USDA is proposing to codify current guidance
allowing State agencies the discretion to issue a media release on
behalf of all sponsors operating SFSP sites, including camps, in the
State. This burden is reflected in OMB Control Number 0584-0280. USDA
does not expect that the proposals outlined in this rule will have any
impact on either the requirements or the burden related to the media
releases; therefore, they will not be included as part of the
rulemaking submission.
Additionally, USDA is proposing a change in the meal claim
validation process that State agencies must follow during sponsor
monitoring reviews. Currently, meal claims have to be validated for 100
percent of a sponsor's sites. This rule proposes to reduce the initial
validation requirement to 10 percent of a sponsor's sites, then
establishes a stepped meal claim validation process for sponsors that
exceed a 5 percent error rate. The burden for validating meal claims of
100 percent of a sponsor's sites for 53 State agencies is estimated at
2,055 hours annually. The proposed claim validation process is expected
to result in an overall reduction of burden, from an estimated 2,055
hours annually to an estimated 287.58 hours annually (a decrease of
1,767.42 hours). This stepped validation process is included as a line
item in the ICR associated with this rulemaking.
For experienced sponsors and sites that have already operated the
SFSP without significant operational problems, applications must
include condensed information that is more likely to change from year
to year, as currently outlined in Sec. 225.6(c)(3). Experienced
sponsors are not required to submit the same level of detail with
regard to the organizational and operational information that is
required of new sponsors.
This rule proposes to permit sponsors in good standing in other
Child Nutrition Programs (NSLP, CACFP, etc.) to follow the application
requirements for experienced sponsors and sites when applying to SFSP,
instead of the application requirements for new sponsors and sites
found at Sec. 225.6(c)(2). Through policy guidance, a sponsor is
considered to be in ``good standing'' if it has been reviewed by the
State agency in the last 12 months and had no major findings or program
violations, or has completed and implemented all corrective actions
from the last compliance review. In addition, a sponsor may be
considered in good standing if it has not been found to be seriously
deficient by the State agency in the past two years and has never been
terminated from another Child Nutrition Program.
This proposed rule change would eliminate duplicative documentation
and paperwork, which saves time for SFSP's 5,524 sponsors (3,314 local/
tribal government sponsors and 2,210 businesses). The amount of time
needed for a sponsor to complete a SFSP application would decrease from
39.5 hours to 38.74 hours. FNS currently estimates a total of 218,198
burden hours for completing these applications. As a result of this
change, FNS estimates a total of 213,999.76 hours for these
applications. Additionally, these proposals will decrease the time
needed for sponsors to submit site information from 1 hour to 0.89
hours. FNS currently estimates a total of 5,524 hours to submit site
information (for 640 new and 2,675 experienced local/tribal government
sponsors, and 426 new and 1,783 experienced business sponsors). As a
result of this proposed rule, FNS estimates a total of 4916.36 burden
hours for submitting this site information.
Currently, SFSP regulations require sponsors applying to
participate in the
[[Page 4082]]
Program to demonstrate financial and administrative capability for
program operations and accept financial responsibility for total
program operations at all sites at which they propose to conduct a food
service (Sec. 225.14(c)(1)). SFAs and CACFP institutions already
undergo a rigorous application process in order to participate in NSLP
and CACFP and have demonstrated that they have the financial and
organizational viability, capability, and accountability necessary to
operate a Child Nutrition Program, and therefore have the potential to
operate the SFSP as well.
In order to streamline requirements between Child Nutrition
Programs and encourage participation, this rule proposes to modify the
requirement for SFAs and CACFP institutions applying to participate in
the SFSP to submit further evidence of financial and administrative
capability, as detailed in Sec. 225.14(c)(1). Roughly 10 percent (553)
of sponsors (332 local/tribal government and 221 business sponsors) are
asked to produce this information annually. It currently takes SFAs and
CACFP institutions 7.2 minutes (0.12 hours) to supply the required
information, for an estimated total of 67.836 burden hours. As a result
of these proposals, FNS estimates that it will take 5.6 minutes (.093
hours) to provide the required information, for an estimated total of
51.429 burden hours.
The current approved burden for OMB Control #0584-0280 is 338,411
hours. This rule is expected to reduce the total burden by 6,590 hours,
resulting in a revised burden of 331,821 hours.
Respondents: SFSP Sponsors.
Sec. Sec. 225.6(c)(1) and (4), 225.14(a)
Estimated Number of Respondents: 5,524.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 5,524.
Estimated Time per Response: 38.74.
Estimated Burden Hours: 213,999.76.
Sec. 225.6(c)(2) and (3)
Estimated Number of Respondents: 5,524.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 5,524.
Estimated Time per Response: 0.89.
Estimated Burden Hours: 4,916.
Sec. Sec. 225.6(e), 225.14(c)(7)
Estimated Number of Respondents: 553.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 553.
Estimated Time per Response: 0.093.
Estimated Burden Hours: 51.
Respondents: State Agencies.
Sec. 225.7(e)(6)
Estimated Number of Respondents: 53.
Estimated Number of Responses per Respondent: 65.38.
Estimated Total Annual Responses: 3,465.
Estimated Time per Response: 0.083.
Estimated Burden Hours: 287.58.
Estimated Total Annual Responses: 15,066.
Estimated Total Annual Burden on Respondents: 219,255.
Reporting
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Difference
Estimated Total Estimated Current OMB due to Differences Total
CFR citation Description Estimated number of frequency of annual avg. number Estimated approved program due to difference
respondents responses records of hours per total hours burden hours changes in adjustments in 0584-0280
response in 0584-0280 0584-0280
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency Level
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
225.7(e)(6)......................... State agencies utilize 53.................... 65.38 3,465 .083 287.58 2,055 -1,767.42 0 -1,767.42
a multi-step process
for meal claim
validation based on
amount of error
detected.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency Level Total Change............................................................................................................................................... -1,767.42
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Current OMB Difference
Affected public/ Estimated number of Estimated Total avg. number Estimated approved due to Differences Total
CFR citation description respondents frequency of annual of hours per total hours burden hours program due to difference
responses records response in 0584-0280 changes adjustments
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sponsor Level
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
225.6(c)(1) and (4), 225.14(a)...... Sponsors submit 3,314 local or tribal 1 3,314 38.74 128,384.36 130,903.00 -2,518.64 0 -2,518.64
written application government.
to SAs for
participation in SFSP.
225.6(c)(1) and (4), 225.14(a)...... Sponsors submit 2,210 business 1 2,210 38.74 85,615.40 87,295.00 -1,679.6000 ............ -1,679.6000
written application sponsors.
to SAs for
participation in SFSP.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total for sponsor applications.......................... 5,524................. 1 5,524 38.74 213,999.76 218,198 -4,198.24 0 -4,198.24
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
225.6(c)(2) and (3)................. Sponsors submit site 640 new local or 1 640 0.89 569.60 640 -70.40 0 -70.40
information for each tribal government
site where a food sponsors.
service operation is
proposed.
225.6(c)(2) and (3)................. Sponsors submit site 2,675 experienced 1 2,675 0.89 2,380.75 2,675 -294.25 0 -294.25
information for each local or tribal
site where a food government sponsors.
service operation is
proposed.
225.6(c)(2) and (3)................. Sponsors submit site 426 new business 1 426 0.89 379 426 -46.8600 0 -46.8600
information for each sponsors.
site where a food
service operation is
proposed.
225.6(c)(2) and (3)................. Sponsors submit site 1,783 experienced 1 1,783 0.89 1,587 1,783 -196.1300 0 -196.1300
information for each business sponsors.
site where a food
service operation is
proposed.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total for sponsors' site information.................... 5,524................. 1 5,524 0.89 4,916 5,524 -608 0 -608
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 4083]]
225.6(e), 225.14(c)(7).............. Sponsors approved for 332 local/tribal 1 332 0.093 30.88 40.84 -9.96 0 -9.96
participation in SFSP government sponsors.
enter into written
agreements with SAs
to operate program in
accordance with
regulatory
requirements.
225.6(e), 225.14(c)(7).............. Sponsors approved for 221 business sponsors. 1 221 0.093 21 27 -6.4470 0 -6.4470
participation in SFSP
enter into written
agreements with SAs
to operate program in
accordance with
regulatory
requirements.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total for sponsor written agreements.................... 553................... 1 553 0.09 51 68 -16 0 -16
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sponsor Level Total Change.............................. 5,524................. 2.1 11,601 18.874 218,967.549 223,789.836 -4,822.3 ............ -4,822.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers presented based on the percentage of sites reviewed under the multi-tiered process.
** Totals may differ due to rounding.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated avg. Current
Estimated Number of Total annual number of Estimated approved Difference due
number responses per responses hours per total hours burden in to program
respondents respondent (col. B x C) response (col. D x E) #0584-0280 changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting
--------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency Level...................... 53 65.38 3,465 0.08 287.61 2,055 -1,767.42
Sponsor Level........................... 5,524 2.1 11,601 18.875 218,968 223,790 -4,822.3
---------------------------------------------------------------------------------------------------------------
Total Reporting..................... 5,577 2.7 15,066 14.552 219,255 225,845 -6,590
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Some totals may not add due to rounding.
E-Government Act Compliance
USDA 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, Penalties, Reporting and recordkeeping
requirements, School breakfast and lunch programs, Surplus agricultural
commodities.
7 CFR Part 215
Food assistance programs, Grant programs--education, Grant
program--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 225
Food assistance programs, Grant programs--health, Infants and
children, Labeling, Reporting and recordkeeping requirements.
7 CFR Part 226
Accounting, Aged, Day care, Food assistance programs, Grant
programs, Grant programs--health, American Indians, Individuals with
disabilities, Infants and children, Intergovernmental relations, Loan
programs, Reporting and recordkeeping requirements, Surplus
agricultural commodities.
Accordingly, 7 CFR parts 210, 220, 215, 225, and 226 are proposed
to be amended as follows:
PART 210--NATIONAL SCHOOL LUNCH PROGRAM
0
1. The authority citation for part 210 continues to read as follows:
Authority: 42 U.S.C. 1751-1760, 1779.
0
2. In Sec. 210.3, add paragraph (e) to read as follows:
Sec. 210.3 Administration.
* * * * *
(e) Authority to waive statute and regulations. (1) If authorized
under the National School Lunch Act or the Child Nutrition Act of 1966,
as amended, FNS may waive provisions of such acts and the provisions of
this part with respect to a State agency or eligible service provider.
(2) A State agency may submit a request for a waiver under
paragraph (e)(1) of this section in accordance with the provisions of
this part and any informational instructions issued by FNS under this
part. A State agency may also submit a request to waive specific
statutory or regulatory requirements on behalf of eligible service
providers that operate in the State. Any waiver must be submitted to
the appropriate FNS Regional office.
(3)(i) An eligible service provider may submit a request for a
waiver under paragraph (e)(1) of this section in accordance with: The
provisions of this part and any informational instructions issued by
FNS under this part and in accordance with any applicable instructions
issued by a State agency. Any waiver submitted by an eligible service
provider must be sent to the State agency for review. A State agency
may deny requests from eligible service providers or it may concur with
the request.
(ii) If the State agency concurs with the request, within 15
calendar days of receipt of the request, the State agency must forward
to the FNS Regional office the request and a rationale supporting the
request. By forwarding the request to the FNS Regional office, the
State agency affirms:
(A) The request meets all requirements for waiver submissions; and
(B) The State agency will conduct all monitoring requirements
related to normal program operations and the implementation of the
waiver.
(iii) If the State agency denies the request, it must notify the
requesting eligible service provider in writing within 30 calendar days
of receipt of the
[[Page 4084]]
request. The State agency response is final and may not be appealed to
FNS.
PART 215--SPECIAL MILK PROGRAM FOR CHILDREN
0
3. The authority citation for part 215 continues to read as follows:
Authority: 42 U.S.C. 1772 and 1779.
0
4. In Sec. 215.3, add paragraph (e) to read as follows:
Sec. 215.3 Administration.
* * * * *
(e) Authority to waive statute and regulations. (1) If authorized
under the National School Lunch Act or the Child Nutrition Act of 1966,
as amended, FNS may waive provisions of such acts and the provisions of
this part with respect to a State agency or eligible service provider.
(2) A State agency may submit a request for a waiver under
paragraph (e)(1) of this section in accordance with the provisions of
this part and any informational instructions issued by FNS under this
part. A State agency may also submit a request to waive specific
statutory or regulatory requirements on behalf of eligible service
providers that operate in the State. Any waiver must be submitted to
the appropriate FNS Regional office.
(3)(i) An eligible service provider may submit a request for a
waiver under paragraph (e)(1) of this section in accordance with the
provisions of this part and any informational instructions issued by
FNS under this part and in accordance with any applicable instructions
issued by a State agency. Any waiver submitted by an eligible service
provider must be sent to the State agency for review. A State agency
may deny requests from eligible service providers or it may concur with
the request.
(ii) If the State agency concurs with the request, within 15
calendar days of receipt of the request, the State agency must forward
to the FNS Regional office the request and a rationale supporting the
request. By forwarding the request to the FNS Regional office, the
State agency affirms:
(A) The request meets all requirements for waiver submissions; and
(B) The State agency will conduct all monitoring requirements
related to normal program operations and the implementation of the
waiver.
(iii) If the State agency denies the request, it must notify the
requesting eligible service provider in writing within 30 calendar days
of receipt of the request. The State agency response is final and may
not be appealed to FNS.
PART 220--SCHOOL BREAKFAST PROGRAM
0
5. The authority citation for part 220 continues to read as follows:
Authority: 42 U.S.C. 1773, 1779, unless otherwise noted.
0
6. In Sec. 220.3, add paragraph (f) to read as follows:
Sec. 203.3 Administration.
* * * * *
(f) Authority to waive statute and regulations. (1) If authorized
under the National School Lunch Act or the Child Nutrition Act of 1966,
as amended, FNS may waive provisions of such acts and the provisions of
this part with respect to a State agency or eligible service provider.
(2) A State agency may submit a request for a waiver under
paragraph (f)(1) of this section in accordance with the provisions of
this part and any informational instructions issued by FNS under this
part. A State agency may also submit a request to waive specific
statutory or regulatory requirements on behalf of eligible service
providers that operate in the State. Any waiver must be submitted to
the appropriate FNS Regional office.
(3)(i) An eligible service provider may submit a request for a
waiver under paragraph (f)(1) of this section in accordance with the
provisions of this part and any informational instructions issued by
FNS under this part and in accordance with any applicable instructions
issued by a State agency. Any waiver submitted by an eligible service
provider must be sent to the State agency for review. A State agency
may deny requests from eligible service providers or it may concur with
the request.
(ii) If the State agency concurs with the request, within 15
calendar days of receipt of the request, the State agency must forward
to the FNS Regional office the request and a rationale supporting the
request. By forwarding the request to the FNS Regional office, the
State agency affirms:
(A) The request meets all requirements for waiver submissions; and
(B) The State agency will conduct all monitoring requirements
related to normal program operations and the implementation of the
waiver.
(iii) If the State agency denies the request, it must notify the
requesting eligible service provider in writing within 30 calendar days
of receipt of the request. The State agency response is final and may
not be appealed to FNS.
PART 225--SUMMER FOOD SERVICE PROGRAM
0
7. The authority citation for 7 CFR part 225 continues to read as
follows:
Authority: Secs. 9, 13 and 14, Richard B. Russell National
School Lunch Act, as amended (42 U.S.C. 1758, 1761 and 1762a).
0
8. In Sec. 225.2:
0
a. Revise the definitions of ``Areas in which poor economic conditions
exist'' and ``Closed enrolled site'';
0
b. In the definition of ``Documentation'', redesignate paragraphs
(a)(1) through (4) as paragraphs (1)(i) through (iv), respectively and
redesignate paragraphs (b)(1) and (2) as paragraphs (2)(i) and (ii),
respectively;
0
c. In the definition of ``Private nonprofit'', redesignate paragraphs
(a) through (e) as paragraph (1) through (5), respectively;
0
d. Add in alphabetical order definitions for ``Net cash resources'',
``Nonprofit food service'', and ``Nonprofit food service account'',;
0
e. In the definition of ``Rural'', redesignate paragraphs (a) and (b)
as paragraph (1) and (2), respectively; and
0
f. Add in alphabetical order definitions for ``Self-preparation site'',
``Site supervisor'', ``Unaffiliated site'' and ``Vended site''.
The revisions and additions read as follows:
Sec. 225.2 Definitions.
* * * * *
Areas in which poor economic conditions exist means:
(1) The attendance area of a school in which at least 50 percent of
the enrolled children have been determined eligible for free or
reduced-price school meals under the National School Lunch Program and
the School Breakfast Program;
(2) A geographic area where, based on the most recent census data
available or information provided from a department of welfare or
zoning commission, at least 50 percent of the children residing in that
area are eligible for free or reduced-price school meals under the
National School Lunch Program and the School Breakfast Program;
(3) A geographic area where a site demonstrates, based on other
approved sources, that at least 50 percent of the children enrolled at
the site are eligible for free or reduced-price school meals under the
National School Lunch Program and the School Breakfast Program; or
(4) A closed enrolled site in which at least 50 percent of the
enrolled children at the site are eligible for free or reduced-price
school meals under the
[[Page 4085]]
National School Lunch Program and the School Breakfast Program, as
determined by approval of applications in accordance with Sec.
225.15(f).
* * * * *
Closed enrolled site means a site which is open only to enrolled
children, as opposed to the community at large, and in which at least
50 percent of the enrolled children at the site are eligible for free
or reduced-price school meals under the National School Lunch Program
and the School Breakfast Program, as determined by approval of
applications in accordance with Sec. 225.15(f), or on the basis of
documentation that the site meets sub-sections (1) through (3) of the
definition of ``areas in which poor economic conditions exist'' as
provided in this section.
* * * * *
Net cash resources means all monies, as determined in accordance
with the State agency's established accounting system that are
available to or have accrued to a sponsor's nonprofit food service at
any given time, less cash payable. Such monies may include, but are not
limited to, cash on hand, cash receivable, earnings on investments,
cash on deposit and the value of stocks, bonds or other negotiable
securities.
* * * * *
Nonprofit food service means all food service operations conducted
by the sponsor principally for the benefit of schoolchildren, all of
the revenue from which is used solely for the operation or improvement
of such food services.
Nonprofit food service account means the restricted account in
which all of the revenue from all food service operations conducted by
the sponsor principally for the benefit of children is retained and
used only for the operation or improvement of the nonprofit food
service. This account shall include, as appropriate, non-Federal funds
used to support program operations, and proceeds from non-program
foods.
* * * * *
Self-preparation site means a site that prepares the majority of
meals that will be served at its site and does not contract with a food
service management company for unitized meals, with or without milk, or
for management services.
* * * * *
Site supervisor means the individual on site for the duration of
the meal service, who has been trained by the sponsor, and is
responsible for all administrative and management activities at a site
including, but not limited to: Ordering meals, maintaining
documentation of meal deliveries, ensuring that all meals served are
safe, and maintaining accurate point of service meal counts.
* * * * *
Unaffiliated site means a site that is legally distinct from the
sponsor.
* * * * *
Unanticipated school closure means any period from October through
April (or any time of the year in an area with a continuous school
calendar) during which children who are not in school due to a natural
disaster, building repair, court order, labor-management disputes, or,
when approved by the State agency, similar cause, may be served meals
at non-school sites through the Summer Food Service Program.
* * * * *
Vended site means a site that serves unitized meals, with or
without milk, from a food service management company.
* * * * *
0
9. In Sec. 225.3, add paragraph (d) to read as follows:
Sec. 225.3 Administration.
* * * * *
(d) Authority to waive statute and regulations. (1) If authorized
under the National School Lunch Act or the Child Nutrition Act of 1966,
as amended, FNS may waive provisions of such Acts and the provisions of
this part with respect to a State agency or eligible service provider.
(2) A State agency may submit a request for a waiver under
paragraph (d)(1) of this section in accordance with the provisions of
this part and any informational instructions issued by FNS under this
part. A State agency may also submit a request to waive specific
statutory or regulatory requirements on behalf of eligible service
providers that operate in the State. Any waiver must be submitted to
the appropriate FNS Regional office.
(3)(i) An eligible service provider may submit a request for a
waiver under paragraph (d)(1) of this section in accordance with the
provisions of this part and any informational instructions issued by
FNS under this part and in accordance with any applicable instructions
issued by a State agency. Any waiver submitted by an eligible service
provider must be sent to the State agency for review. A State agency
may deny requests from eligible service providers or it may concur with
the request.
(ii) If the State agency concurs with the request, within 15
calendar days of receipt of the request, the State agency must forward
to the FNS Regional office the request and a rationale supporting the
request. By forwarding the request to the FNS Regional office, the
State agency affirms:
(A) The request meets all requirements for waiver submissions; and
(B) The State agency will conduct all monitoring requirements
related to normal program operations and the implementation of the
waiver.
(iii) If the State agency denies the request, it must notify the
requesting eligible service provider in writing within 30 calendar days
of receipt of the request. The State agency response is final and may
not be appealed to FNS.
Sec. 225.4 [Amended]
0
10. In Sec. 225.4, amend paragraph (d)(7) by removing ``Sec.
225.6(h)'' and adding ``Sec. 225.6(l)'' in its place.
0
11. In Sec. 225.6:
0
a. In the last sentence of paragraph (b)(1), remove ``during the period
from October through April (or at any time of the year in an area with
a continuous school calendar)'';
0
b. In the second sentence of paragraph (b)(4), remove ``during the
period from October through April (or at any time of the year in an
area with a continuous school calendar)'';
0
c. Revise paragraph (c);
0
d. Redesignate paragraphs (d) through (i) as paragraphs (h) through
(m), respectively, and add new paragraphs (d) through (g);
0
e. Add a sentence to the end of newly redesignated paragraphs (h)(2)(i)
and (iii);
0
f. Revise newly redesignated paragraphs (i)(7) and (15);
0
g. In newly designated paragraph (l)(2)(i), remove ``(h)(3)'' add
``(l)(3)'' in its place;
0
h. In newly designated paragraph (l)(2)(iii), remove ``Sec.
225.6(d)(2)'' and add ``Sec. 225.6(h)(2)'' in its place; and
0
i. In newly designated paragraph (l)(2)(xiv), remove ``Sec. 225.6(f)''
and add ``Sec. 225.6(j)'' in its place.
The additions and revisions read as follows:
Sec. 225.6 State agency responsibilities.
* * * * *
(c) Content of sponsor application--(1) Application form. (i) The
sponsor must submit a written application to the State agency for
participation in the Program. The State agency may use the application
form developed by FNS, or develop its own application form. Application
to sponsor the Program must be made on a timely basis within the
deadlines established under Sec. 225.6(b)(1).
(ii) At the discretion of the State agency, sponsors proposing to
serve an
[[Page 4086]]
area affected by an unanticipated school closure may be exempt from
submitting a new application if they have participated in the Program
at any time during the current year or in either of the prior two
calendar years.
(iii) Requirements for new sponsors and sponsors that have
experienced significant operational problems in the prior year, as
determined by the State agency, are found under paragraph (c)(2) of
this section.
(iv) Requirements for experienced sponsors are found under
paragraph (c)(3) of this section.
(2) Application requirements for new sponsors and sponsors that
have experienced significant operational problems in the prior year.
New sponsors and sponsors that have experienced significant operational
problems in the prior year, as determined by the State agency, must
include the following information in their applications:
(i) A complete management plan, as described in paragraph (e) of
this section;
(ii) A free meal policy statement, as described in paragraph (f) of
this section;
(iii) A site information sheet for each site where a food service
operation is proposed, as described in paragraph (g)(1) of this
section;
(iv) Information in sufficient detail to enable the State agency to
determine that the sponsor meets the criteria for participation in the
Program, as described in Sec. 225.14;
(v) Information on the extent of Program payments needed, including
a request for advance payments and start-up payments, if applicable;
(vi) A staffing and monitoring plan;
(vii) A complete administrative budget for State agency review and
approval, which includes:
(A) The projected administrative expenses that the sponsor expects
to incur during the operation of the Program; and
(B) Information in sufficient detail to enable the State agency to
assess the sponsor's ability to operate the Program within its
estimated reimbursement.
(viii) A summary of how meals will be obtained at each site (e.g.,
self-prepared at each site, self-prepared and distributed from a
central kitchen, purchased from a school food authority, competitively
procured from a food service management company);
(ix) If an invitation for bid is required under Sec. 225.15(m), a
schedule for bid dates and a copy of the invitation for bid; and
(x) For each sponsor which seeks approval as a unit of local,
municipal, county or State government under Sec. 225.14(b)(3) or as a
private nonprofit organization under Sec. 225.14(b)(5), certification
that the sponsor has administrative oversight, as required under Sec.
225.14(d)(3).
(3) Application requirements for experienced sponsors. The
following information must be included in the applications of
experienced sponsors:
(i) A site information sheet for each site where a food service
operation is proposed, as described under paragraph (g)(2) of this
section;
(ii) Information on the extent of Program payments needed,
including a request for advance payments and start-up payments, if it
is applicable;
(iii) A staffing and monitoring plan;
(iv) A complete administrative budget for State agency review and
approval, which includes:
(A) The projected administrative expenses which a sponsor expects
to incur during the operation of the Program; and
(B) Information in sufficient detail to enable the State agency to
assess the sponsor's ability to operate the Program within its
estimated reimbursement.
(v) If the method of obtaining meals is changed, a summary of how
meals will be obtained at each site (e.g., self-prepared at each site,
self-prepared and distributed from a central kitchen, purchased from a
school food authority, competitively procured from a food service
management company); and
(vi) If an invitation for bid is required under Sec. 225.15(m), a
schedule for bid dates, and a copy of the invitation for bid, if it is
changed from the previous year.
(4) Applications for school food authorities and Child and Adult
Care Food Program institutions. At the discretion of the State agency,
school food authorities in good standing in the National School Lunch
Program or School Breakfast Program, as applicable, and institutions in
good standing in the Child and Adult Care Food Program may apply to
operate the Program at the same sites where they provide meals through
the aforementioned Programs by following the procedures for experienced
sponsors outlined in paragraph (c)(3) of this section.
(d) Performance Standards. The State agency may only approve the
applications of those sponsors that meet the three performance
standards outlined in this section: Financial viability, administrative
capability, and Program accountability. The State agency must deny
applications that do not meet all of these standards. The State agency
must consider past performance in the SFSP or another Child Nutrition
Program, and any other factors it deems relevant when determining
whether the sponsor's application meets the following standards:
(1) Performance Standard 1. The sponsor must be financially viable.
The sponsor must expend and account for Program funds, consistent with
this part; FNS Instruction 796-4, Financial Management in the Summer
Food Service Program; 2 CFR part 200, subpart D; and USDA regulations 2
CFR parts 400 and 415. To demonstrate financial viability and financial
management, the sponsor's management plan must:
(i) Describe the community's need for summer meals and the
sponsor's recruitment strategy:
(A) Explain how the sponsor's participation will help ensure the
delivery of Program benefits to otherwise unserved sites or children;
and
(B) Describe how the sponsor will recruit sites, consistent with
any State agency requirements.
(ii) Describe the sponsor's financial resources and financial
history:
(A) Show that the sponsor has adequate sources of funds available
to operate the Program, pay employees and suppliers during periods of
temporary interruptions in Program payments, and pay debts if fiscal
claims are assessed against the sponsor; and
(B) Provide audit documents, financial statements, and other
documentation that demonstrate financial viability.
(iii) Ensure that all costs in the sponsor's budget are necessary,
reasonable, allowable, and appropriately documented.
(2) Performance Standard 2. The sponsor must be administratively
capable. Appropriate and effective management practices must be in
effect to ensure that Program operations meet the requirements of this
part. To demonstrate administrative capability, the sponsor must:
(i) Have an adequate number and type of qualified staff to ensure
the operation of the Program, consistent with this part; and
(ii) Have written policies and procedures that assign Program
responsibilities and duties and ensure compliance with civil rights
requirements.
(3) Performance Standard 3. The sponsor must have internal controls
and other management systems in place to ensure fiscal accountability
and operation of the Program, consistent with this part. To demonstrate
Program accountability, the sponsor must:
[[Page 4087]]
(i) Demonstrate that the sponsor has a financial system with
management controls specified in written operational policies that will
ensure that:
(A) All funds and property received are handled with fiscal
integrity and accountability;
(B) All expenses are incurred with integrity and accountability;
(C) Claims will be processed accurately, and in a timely manner;
(D) Funds and property are properly safeguarded and used, and
expenses incurred, for authorized Program purposes; and
(E) A system of safeguards and controls is in place to prevent and
detect improper financial activities by employees.
(ii) Maintain appropriate records to document compliance with
Program requirements, including budgets, approved budget amendments,
accounting records, management plans, and site operations.
(e) Management plan--(1) Compliance. The State agency must require
the submission of a management plan to determine compliance with
performance standards established under paragraph (d) of this section.
(2) Contents. Sponsors must submit a complete management plan that
includes:
(i) Detailed information on the sponsor's management and
administrative structure, including information that demonstrates the
sponsor's financial viability and financial management described under
paragraph (d)(1) of this section;
(ii) Information that demonstrates compliance with each of the
performance standards outlined under paragraph (d) of this section;
(iii) A list or description of the staff assigned to perform
Program monitoring required under Sec. 225.15(d)(2) and (3) of this
part;
(iv) An administrative budget that includes projected SFSP
administrative earnings and expenses, in order for the State agency to
fulfill responsibilities under paragraph (b)(7) of this section; and
(v) For each sponsor which submits an application under paragraph
(c)(1) of this section, information in sufficient detail to demonstrate
that the sponsor will:
(A) Provide adequate and not less than annual training of sponsor's
staff and sponsored sites, as required under Sec. 225.15(d)(1);
(B) Perform monitoring consistent with Sec. 225.15(d)(2) and (3),
to ensure that all site operations are accountable and appropriate;
(C) Accurately classify sites consistent with Sec. 225.6(g)(1) and
(2);
(D) Demonstrate the sponsor's compliance with meal service,
recordkeeping, and other operational requirements of this part;
(E) Provide meals that meet the meal patterns set forth in Sec.
225.16;
(F) Have a food service that complies with applicable State and
local health and sanitation requirements;
(G) Comply with civil rights requirements;
(H) Maintain complete and appropriate records on file; and
(I) Claim reimbursement only for eligible meals.
(f) Free meal policy statement--(1) Nondiscrimination statement.
(i) Each sponsor must submit a nondiscrimination statement of its
policy for serving meals to children. The statement must consist of:
(A) An assurance that all children are served the same meals and
that there is no discrimination in the course of the food service; and
(B) Except for camps, a statement that the meals served are free at
all sites.
(ii) A school sponsor must submit the policy statement only once,
with the initial application to participate as a sponsor. However, if
there is a substantive change in the school's free and reduced-price
policy, a revised policy statement must be provided at the State
agency's request.
(iii) In addition to the information described in paragraph (i) of
this section, the policy statement of all camps that charge separately
for meals must also include:
(A) A statement that the eligibility standards conform to the
Secretary's family size and income standards for reduced-price school
meals;
(B) A description of the method to be used in accepting
applications from families for Program meals that ensures that
households are permitted to apply on behalf of children who are members
of households receiving SNAP, FDPIR, or TANF benefits using the
categorical eligibility procedures described in Sec. 225.15(f);
(C) A description of the method to be used by camps for collecting
payments from children who pay the full price of the meal while
preventing the overt identification of children receiving a free meal;
(D) An assurance that the camp will establish hearing procedures
for families requesting to appeal a denial of an application for free
meals. These procedures must meet the requirements set forth in
paragraph (f)(2) of this section;
(E) An assurance that, if a family requests a hearing, the child
will continue to receive free meals until a decision is rendered; and
(F) An assurance that there will be no overt identification of free
meal recipients and no discrimination against any child on the basis of
race, color, national origin, sex, age, or disability.
(2) Hearing procedures statement. Each camp must submit a copy of
its hearing procedures with its application. At a minimum, the camp's
procedures must provide that:
(i) A simple, publicly announced method will be used for a family
to make an oral or written request for a hearing;
(ii) The family will have the opportunity to be assisted or
represented by an attorney or other person;
(iii) The family will have an opportunity to examine the documents
and records supporting the decision being appealed, both before and
during the hearing;
(iv) The hearing will be reasonably prompt and convenient for the
family;
(v) Adequate notice will be given to the family of the time and
place of the hearing;
(vi) The family will have an opportunity to present oral or
documented evidence and arguments supporting its position;
(vii) The family will have an opportunity to question or refute any
testimony or other evidence and to confront and cross-examine any
adverse witnesses;
(viii) The hearing will be conducted and the decision made by a
hearing official who did not participate in the action being appealed;
(ix) The decision will be based on the oral and documentary
evidence presented at the hearing and made a part of the record;
(x) The family and any designated representative will be notified
in writing of the decision;
(xi) A written record will be prepared for each hearing, which
includes the action being appealed, any documentary evidence and a
summary of oral testimony presented at the hearing, the decision and
the reasons for the decision, and a copy of the notice sent to the
family; and
(xii) The written record will be maintained for a period of three
years following the conclusion of the hearing and will be available for
examination by the family or its representatives at any reasonable time
and place.
(g) Site information sheet. The State agency must develop a site
information sheet for sponsors.
(1) New sites. The application submitted by sponsors must include a
[[Page 4088]]
site information sheet for each site where a food service operation is
proposed. At a minimum, the site information sheet must demonstrate or
describe the following:
(i) An organized and supervised system for serving meals to
children who come to the site;
(ii) The estimated number of meals to be served, types of meals to
be served, and meal service times;
(iii) Whether the site is rural, as defined in Sec. 225.2, or non-
rural;
(iv) Whether the site's food service will be self-prepared or
vended, as defined in Sec. 225.2;
(v) Arrangements for delivery and holding of meals until meal
service times and storing and refrigerating any leftover meals until
the next day, within standards prescribed by State or local health
authorities;
(vi) Access to a means of communication to make necessary
adjustments in the number of meals delivered, based on changes in the
number of children in attendance at each site;
(vii) Arrangements for food service during periods of inclement
weather; and
(viii) For open sites and restricted open sites:
(A) Documentation supporting the eligibility of each site as
serving an area in which poor economic conditions exist;
(B) When school data are used, new documentation is required every
five years;
(C) When census data are used, new documentation is required every
five years, or earlier, if the State agency believes that an area's
socioeconomic status has changed significantly since the last census;
and
(D) At the discretion of the State agency, sponsors proposing to
serve an area affected by an unanticipated school closure may be exempt
from submitting new site documentation if the sponsor has participated
in the Program at any time during the current year or in either of the
prior two calendar years.
(ix) For closed enrolled sites:
(A) The projected number of children enrolled and the projected
number of children eligible for free and reduced-price school meals for
each of these sites; or
(B) Documentation supporting the eligibility of each site as
serving an area in which poor economic conditions exist;
(C) When school data are used, new documentation is required every
five years;
(D) When census data are used, new documentation is required every
five years, or earlier, if the State agency believes that an area's
socioeconomic status has changed significantly since the last census.
(x) For NYSP sites, certification from the sponsor that all of the
children who will receive Program meals are enrolled participants in
the NYSP.
(xi) For camps, the number of children enrolled in each session who
meet the Program's income standards. If such information is not
available at the time of application, this information must be
submitted as soon as possible thereafter, and in no case later than the
filing of the camp's claim for reimbursement for each session;
(xii) For sites that will serve children of migrant workers:
(A) Certification from a migrant organization, which attests that
the site serves children of migrant workers; and
(B) Certification from the sponsor that the site primarily serves
children of migrant workers, if non-migrant children are also served.
(2) Experienced sites. The application submitted by sponsors must
include a site information sheet for each site where a food service
operation is proposed. The State agency may require sponsors of
experienced sites to provide information described in paragraph (g)(1)
of this section. At a minimum, the site information sheet must
demonstrate or describe the following:
(i) The estimated number of meals, types of meals to be served, and
meal service times; and
(ii) For open sites and restricted open sites:
(A) Documentation supporting the eligibility of each site as
serving an area in which poor economic conditions exist;
(B) When school data are used, new documentation is required every
five years;
(C) When census data are used, new documentation is required every
five years, or earlier, if the State agency believes that an area's
socioeconomic status has changed significantly since the last census;
and
(D) Any site that a sponsor proposes to serve during an
unanticipated school closure, which has participated in the Program at
any time during the current year or in either of the prior two calendar
years, is considered eligible without new documentation.
(iii) For closed enrolled sites:
(A) The projected number of children enrolled and the projected
number of children eligible for free and reduced-price school meals for
each of these sites; or
(B) Documentation supporting the eligibility of each site as
serving an area in which poor economic conditions exist;
(C) When school data are used, new documentation is required every
five years;
(D) When census data are used, new documentation is required every
five years, or earlier, if the State agency believes that an area's
socioeconomic status has changed significantly since the last census.
(iv) For NYSP sites, certification from the sponsor that all of the
children who will receive Program meals are enrolled participants in
the NYSP.
(v) For camps, the number of children enrolled in each session who
meet the Program's income standards. If such information is not
available at the time of application, this information must be
submitted as soon as possible thereafter, and in no case later than the
filing of the camp's claim for reimbursement for each session.
* * * * *
(h) * * *
(2) * * *
(i) * * * The State agency may consider participation at other
similar sites located in the area, documentation of programming taking
place at the site, or statistics on the number of children residing in
the area.
* * * * *
(iii) * * * The sponsor may request an upward adjustment at any
point prior to submitting the claim for the impacted reimbursement
period.
* * * * *
(i) * * *
(7) Claim reimbursement only for the types of meals specified in
the agreement that are served:
(i) Without charge to children at approved sites, except camps,
during the approved meal service time;
(ii) Without charge, in camps, to children who meet the Program's
income standards;
(iii) Within the approved level for the maximum number of
children's meals that may be served, if a maximum approved level is
required under Sec. 225.6(h)(2);
(iv) At the approved meal service time, unless a change is approved
by the State agency, as required under Sec. 225.16(c); and
(v) At the approved site, unless the requirements in Sec.
225.16(g) are met.
* * * * *
(15) Maintain children on site while meals are consumed. Sponsors
may allow a child to take one fruit, vegetable, or grain item off-site
for later consumption if the requirements in Sec. 225.16(h) are met;
and
* * * * *
[[Page 4089]]
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12. In Sec. 225.7:
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a. In paragraph (a), add the words ``or via the internet'' at the end
of the fifth sentence and remove the words ``during the period from
October through April (or at any time of the year in an area with a
continuous school calendar)'' in the sixth sentence;
0
b. Revise paragraph (d);
0
c. Redesignate paragraphs (e), (f), and (g) as paragraphs (l), (m), and
(n), respectively; and
0
d. Add new paragraphs (e) through (k).
The revision and additions read as follows:
Sec. 225.7 Program monitoring and assistance.
* * * * *
(d) Pre-approval visits. The State agency shall conduct pre-
approval visits of sponsors and sites, as specified below, to assess
the applicant sponsor's or site's potential for successful Program
operations and to verify information provided in the application. The
State agency shall visit prior to approval:
(1) All applicant sponsors that did not participate in the program
in the prior year. However, if a sponsor is a school food authority,
was reviewed by the State agency under the National School Lunch
Program during the preceding 12 months, and had no significant
deficiencies noted in that review, a pre-approval visit may be
conducted at the discretion of the State agency. In addition, pre-
approval visits of sponsors proposing to operate the Program during
unanticipated school closures may be conducted at the discretion of the
State agency;
(2) All applicant sponsors that had operational problems noted in
the prior year; and
(3) All sites that the State agency has determined need a pre-
approval visit.
(e) Sponsor and site reviews--(1) General. The State agency must
review sponsors and sites to ensure compliance with Program
regulations, the Department's non-discrimination regulations (7 CFR
part 15), and any other applicable instructions issued by the
Department.
(2) Sample selection. In determining which sponsors and sites to
review, the State agency must, at a minimum, consider the sponsors and
sites' previous participation in the Program, their current and
previous Program performance, and the results of previous reviews.
(3) School Food Authorities. When the same school food authority
personnel administer this Program as well as the National School Lunch
Program (7 CFR part 210), the State agency is not required to conduct a
review of the Program in the same year in which the NSLP operations
have been reviewed and determined to be satisfactory.
(4) Frequency and number of required reviews. State agencies must:
(i) Conduct a review of every new sponsor at least once during the
first year of operation;
(ii) Annually review a number of sponsors whose program
reimbursements, in the aggregate, accounted for at least one-half of
the total program meal reimbursements in the State in the prior year;
(iii) Annually review every sponsor that experienced significant
operational problems in the prior year;
(iv) Review each sponsor at least once every three years; and
(v) As part of each sponsor review, conduct reviews of at least 10
percent of each reviewed sponsor's sites, or one site, whichever number
is greater.
(5) Site selection criteria. (i) When selecting sites to meet the
minimum number of sites required under paragraph (e)(4)(v) of this
section, State agencies should, to the maximum extent possible, select
sites that reflect the sponsor's entire population of sites. Site
characteristics that should be reflected in the sites selected include:
(A) The maximum number of meals approved to serve under Sec.
225.6(h)(1) and (2);
(B) Method of obtaining meals (i.e., self-preparation, vended meal
service);
(C) Time since last site review by State agency;
(D) Site type (i.e., open, closed, camp);
(E) Type of physical location (e.g., school, outdoor area,
community center);
(F) Rural designation (i.e., rural, as defined in Sec. 225.2, or
non-rural); and
(G) Affiliation with the sponsor, as defined in Sec. 225.2.
(ii) The State agency may use additional criteria to select sites
including, but not limited to: Recommendations from the sponsoring
organization, findings of other audits or reviews, or any indicators of
potential error in daily meal counts (e.g., identical or very similar
claiming patterns, or large changes in free meal counts).
(6) Meal claim validation. As part of every sponsor review, the
State agency must validate the sponsor's meal claim utilizing a record
review process developed by the State agency that must include, at a
minimum, reconciling delivery receipts, daily meal counts from sites,
and the sponsor's claim consolidation spreadsheet against the meals
claimed for reimbursement by the sponsor for the period under review.
For the purposes of this section, the average percent error includes
both overclaims and underclaims. Claims against sponsors as a result of
meal claim validation should be assessed after the conclusion of the
meal claim validation process in accordance with Sec. 225.12. State
agencies must follow the process identified below to conduct the meal
claim validation:
(i) The State agency must complete an initial validation of 100
percent of meal claims within the review period for the sites under
review to satisfy the requirements outlined in paragraph (e)(4)(v) of
this section. In determining the percentage of error, fractions must be
rounded up (>=0.5) or down (
