Cherokee Nation
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DATE: | November 12, 2014 | |
POLICY MEMO: | SP 06 - 2015 | |
SUBJECT: | Farm to School and School Garden Expenses | |
TO: | Regional Directors Special Nutrition Programs All Regions | State Directors Child Nutrition Programs All States |
Recently, we have received several questions about the use of funds from the nonprofit school food service account to cover expenditures related to farm to school activities and school gardens. The questions and answers below address specific scenarios that school food authorities (SFAs) may be dealing with when considering the allowability of such costs. Please see SP 32-2009, School Garden Q&As for additional information about school garden expenses.
Food and Nutrition Service's (FNS) goal is to ensure that program funds are used to operate and/or improve the school food service and that schools maintain a financially sound nonprofit food service account. We also encourage innovative ways of meeting the goals of the school meals programs; nutrition, food, and agriculture education and school garden activities may offer a viable opportunity for supporting the programs.
School gardening and other farm to school educational activities can improve school food service operations in a variety of ways. Below is a list of the positive impacts associated with school gardens:
Recent research supports the above statements. Please see the USDA Farm to School Program website for a full synopsis.
A1: School nutrition directors must comply with federal regulations related to resource management, procurement, and cost principles regarding allowable costs when spending funds from the nonprofit school food service account. The primary purpose of the nonprofit school food service account is to operate or improve a school meals program that serves nutritious meals meeting the meal pattern requirements. When evaluating expenses (including program food, supplies, labor, equipment, services, educational activities indirect costs, etc.), SFAs must ensure the funds are supporting the operation and/or improvement of the school meals program and that all expenses are allowable (i.e., necessary, reasonable, and allocable) in accordance with Office of Management and Budget (OMB) Guidance under the “Cost Principles for state, local, and Indian tribal governments”.
SFAs may want to use the following questions to assess if costs associated with school gardens or farm to school activities are allowable expenses from the nonprofit school food service account:
Once an SFA has completed this assessment, it may determine that funding a staff position or activities related to nutrition education, school gardening, or farm to school will support the operation and improvement of the Program, and that the associated costs are necessary, reasonable and allocable in accordance with the OMB Guidance under the “Cost Principles for State, Local and Indian Tribal Governments.” Continual assessment of these costs is essential to ensure that the nonprofit school food service account can support these activities without placing the SFA at risk for failing to meet the key mission of serving nutritious meals to students meeting the meal pattern requirements.
Note that staff positions strictly supporting horticulture classes, Future Farmers of America clubs or other school associations cannot be funded by the nonprofit food service account.
A2: As noted in SP-32-2009, School Garden Q&As, if the garden is used within the context of the school meal programs and serves the purpose of operating and improving the school meal program, supplies and equipment for the school garden may be purchased with funds from the nonprofit school food service account. Many costs associated with the school garden or farm to school efforts are for infrastructure which may last for several school years. Depending on the cost, hoop houses and high or low tunnels may be considered a supply or equipment.
Classifying moveable structures (e.g., hoop houses, high and low tunnels) as a supply or equipment is dependent upon the acquisition cost. 2 CFR Part 225 Appendix B Section 15 defines equipment as an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the governmental unit for financial statement purposes, or $5,000. Therefore, items with an acquisition cost less than the capitalization threshold established by the governmental unit or the federal threshold, $5,000, are considered supplies. Supplies, such as seeds, fertilizer, water cans, rakes, etc., may be considered allowable with the understanding that the products grown in the school garden or school farm are used within the context of the Program.
As with any cost, the SFA should evaluate the expense using the previously listed assessment questions. However, equipment costs (as defined above) require prior written approval of its awarding agency before incurring the cost, unless the equipment has been identified on the state agency list approved by FNS, per SP 31-2014, State Agency Prior Approval Process for School Food Authority (SFA) Equipment Purchases, dated March 28, 2014.
A3: Per 7 CFR Part 210.14(a), “revenues received by the nonprofit school food service are to be used only for the operation and/or improvement of such food service, except that, such revenue must not be used to purchase land or buildings unless otherwise approved by FNS, or to construct buildings.”
Further, FNS existing policy has been and continues to be to not approve the cost of building purchases because program funds are made available to help support the costs of nutritional benefits for children in school settings. The goal of the nonprofit school food service account is to ensure that an SFA maintains the necessary funding to operate the school meals programs, not used to cover major expenses that should be borne by the school district's general funds (i.e., capital infrastructure costs).
A4: Yes, SFAs may enter into an intergovernmental (also referred to as an interdepartmental) agreement with the school garden or school farm to purchase products from the garden. The entity operating the school garden must be the local educational agencies or another governmental entity. As noted in 7 CFR 3016.36 (b)(5), “to foster greater economy and efficiency, grantees and subgrantees are encouraged to enter into state and local intergovernmental agreements for procurement or use of common goods and services,” and in this case the school garden and products from the garden can be considered a common good. A price analysis must be conducted to ensure that products purchased from the school garden are purchased at reasonable prices.
A5: SFAs have three options for using school garden products in school meals. Note that USDA does not impose specific food safety requirements; however, many state and local health departments have school garden food safety guidance and requirements.
Sarah E. Smith Holmes
Director
Program Monitoring and Operational Support Division
The contents of this guidance document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.