7 CFR § 225.6 - State agency responsibilities.
(a) General responsibilities.
(1) The State agency shall provide sufficient qualified consultative, technical, and managerial personnel to administer the Program, monitor performance, and measure progress in achieving Program goals. The State agency shall assign Program responsibilities to personnel to ensure that all applicable requirements under this part are met.
(2) By February 1 of each fiscal year, each State agency must announce the purpose, eligibility criteria, and availability of the Program throughout the State, through appropriate means of communication. As part of this effort, each State agency must:
(i) Identify areas in which poor economic conditions exist to qualify for the Program and actively seek eligible applicant sponsors to serve:
(A) Rural areas;
(B) Indian Tribal territories; and
(C) Areas with a concentration of migrant farm workers.
(ii) The State agency must identify rural areas with no congregate meal service and encourage participating sponsors to provide non-congregate meals to eligible children in those areas.
(iii) The State agency must target outreach efforts to priority outreach areas.
(iv) For approval of closed enrolled sites, the State agency must establish criteria to ensure that operation of a closed enrolled site does not limit Program access for eligible children in the area where the site is located.
(3) Each State agency shall require applicant sponsors submitting Program application site information sheets, Program agreements, or a request for advance payments, and sponsors submitting claims for reimbursement to certify that the information submitted on these forms is true and correct and that the sponsor is aware that deliberate misrepresentation or withholding of information may result in prosecution under applicable State and Federal statutes.
(4) In addition to the warnings specified in paragraph (a)(3) of this section, State agencies may include the following information on applications and pre-application materials distributed to prospective sponsors:
(i) The criminal penalties and provisions established in section 12(g) of the National School Lunch Act (42 U.S.C. 1760(g)) that states substantially: Whoever embezzles, willfully misapplies, steals, or obtains by fraud any funds, assets, or property that are the subject of a grant or other form of assistance under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), whether received directly or indirectly from the United States Department of Agriculture, or whoever receives, conceals, or retains such funds, assets, or property to personal use or gain, knowing such funds, assets, or property have been embezzled, willfully misapplied, stolen, or obtained by fraud shall, if such funds, assets, or property are of the value of $100 or more, be fined not more than $25,000 or imprisoned not more than five years, or both, or, if such funds, assets, or property are of a value of less than $100, shall be fined not more than $1,000 or imprisoned for not more than one year, or both.
(ii) The procedures for termination from Program participation of any site or sponsor which is determined to be seriously deficient in its administration of the Program. In addition, the application may also state that appeals of sponsor or site terminations will follow procedures mandated by the State agency and will also meet the minimum requirements of 7 CFR 225.13.
(b) Approval of sponsor applications.
(1) Each State agency must inform all of the previous year's sponsors which meet current eligibility requirements and all other potential sponsors of the deadline date for submitting a written application for participation in the Program. The State agency must require that all applicant sponsors submit written applications for Program participation to the State agency by June 15. However, the State agency may establish an earlier deadline for the Program application submission. Sponsors applying for participation in the Program due to an unanticipated school closure shall be exempt from the application submission deadline.
(2) Each State agency shall inform potential sponsors of the procedure for applying for advance operating and administrative costs payments as provided for in § 225.9(c). Where applicable, each State agency shall inform sponsors of the procedure for applying for start-up payments provided for in § 225.9(a).
(3) Within 30 days of receiving a complete and correct application, the State agency shall notify the applicant of its approval or disapproval. If an incomplete application is received, the State agency shall so notify the applicant within 15 days and shall provide technical assistance for the purpose of completing the application. Any disapproved applicant shall be notified of its right to appeal under § 225.13.
(4) The State agency shall determine the eligibility of sponsors applying for participation in the Program in accordance with the applicant sponsor eligibility criteria outlined in § 225.14. However, State agencies may approve the application of an otherwise eligible applicant sponsor which does not provide a year-round service to the community which it proposes to serve under the Program only if it meets one or more of the following criteria: It is a residential camp; it proposes to provide a food service for the children of migrant workers; a failure to do so would deny the Program to an area in which poor economic conditions exist; a significant number of needy children will not otherwise have reasonable access to the Program; or it proposes to serve an area affected by an unanticipated school closure. In addition, the State agency may approve a sponsor for participation during an unanticipated school closure without a prior application if the sponsor participated in the program at any time during the current year or in either of the prior two calendar years.
(5) The State agency must use the following priority system in approving applicants to operate sites that propose to serve the same area or the same enrolled children:
(i) Public or nonprofit private school food authorities;
(ii) Public agencies and private nonprofit organizations that have demonstrated successful program performance in a prior year;
(iii) New public agencies; and
(iv) New private nonprofit organizations.
(v) If two or more sponsors that qualify under paragraph (b)(5)(ii) of this section apply to serve the same area, the State agency must determine on a case-by-case basis which sponsor or sponsors it will select to serve the needy children in the area. The State agency should consider the resources and capabilities of each applicant.
(6) The State agency must not approve any sponsor to operate more than 200 sites or to serve more than an average of 50,000 children per day. However, the State agency may approve exceptions if:
(i) The applicant demonstrates that it has the capability of managing a program larger than the limits in this paragraph (b)(6); and
(ii) The State agency has the capacity to conduct reviews of at least 10 percent of the sponsor's sites, as described in § 225.7(e)(4)(v).
(7) The State agency shall review each applicant's administrative budget as a part of the application approval process in order to assess the applicant's ability to operate in compliance with these regulations within its projected reimbursement. In approving the applicant's administrative budget, the State agency shall take into consideration the number of sites and children to be served, as well as any other relevant factors. A sponsor's administrative budget shall be subject to review for adjustments by the State agency if the sponsor's level of site participation or the number of meals served to children changes significantly. State agencies may exempt school food authorities applying to operate the SFSP from submitting a separate budget to the State agency, if the school food authority submits an annual budget for the National School Lunch Program and the submitted budget includes the operation of SFSP.
(8) Applicants which qualify as camps and sponsors of conditional non-congregate sites must be approved for reimbursement only for meals served free to enrolled children who meet the Program's income standards.
(9) The State agency shall not approve the application of any applicant sponsor identifiable through its organization or principals as a sponsor which has been determined to be seriously deficient as described in § 225.11(c). However, the State agency may approve the application of a sponsor which has been disapproved or terminated in prior years in accordance with this paragraph if the applicant demonstrates to the satisfaction of the State agency that it has taken appropriate corrective actions to prevent recurrence of the deficiencies.
(10) If the sponsor's application to participate is denied, the official making the determination of denial must notify the applicant sponsor in writing stating all of the grounds on which the State agency based the denial. Pending the outcome of a review of a denial, the State agency shall proceed to approve other applicants in accordance with its responsibilities under paragraph (b)(5) of this section, without regard to the application under review.
(11) The State agency shall not approve the application of any applicant sponsor which submits fraudulent information or documentation when applying for Program participation or which knowingly withholds information that may lead to the disapproval of its application. Complete information regarding such disapproval of an applicant shall be submitted by the State agency through FNSRO to OIG.
(12) The State agency must not deny a sponsor's application based solely on the sponsor's intent to provide a non-congregate meal service.
(c) Content of sponsor application—(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, provided that the form requests the full legal name, any previously used names, mailing address; date of birth of the sponsor's responsible principals, which include the executive director and board chair; and the sponsor's Federal Employer Identification Number (FEIN) or Unique Entity Identifier (UEI). Application to sponsor the Program must be made on a timely basis within the deadlines established under paragraph (b)(1) of this section.
(ii) At the discretion of the State agency, sponsors proposing to serve an 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 full 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 § 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 § 225.15(m), a schedule for bid dates and a copy of the invitation for bid;
(x) For each sponsor which seeks approval as a unit of local, municipal, county or State government under § 225.14(b)(3) or as a private nonprofit organization under § 225.14(b)(5), certification that the sponsor has administrative oversight, as required under § 225.14(d)(3); and
(xi) Procedures that document meals are only distributed, to a reasonable extent, to eligible children and that duplicate meals are not distributed to any child, if the applicant sponsor is electing to use the non-congregate meal service options described in § 225.16(i)(1) and (2).
(3) Application requirements for experienced sponsors. The following information must be included in the applications of experienced sponsors:
(i) A simplified or full management plan, as described in paragraph (e) of this section;
(ii) A site information sheet for each site where a food service operation is proposed, as described under paragraph (g)(2) of this section;
(iii) Information on the extent of Program payments needed, including a request for advance payments and start-up payments, if it is applicable;
(iv) A staffing and monitoring plan;
(v) 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.
(vi) 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);
(vii) If an invitation for bid is required under § 225.15(m), a schedule for bid dates, and a copy of the invitation for bid, if it is changed from the previous year; and
(viii) Procedures that document meals are only distributed, to a reasonable extent, to eligible children and that duplicate meals are not distributed to any child, if the applicant sponsor is electing to use the non-congregate meal service options described in § 225.16(i)(1) and (2).
(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 Summer Food Service 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:
(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.
(i) 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 (e)(2) of this section.
(ii) Requirements for experienced sponsors are found under paragraph (e)(3) of this section.
(iii) Requirements for school food authorities in good standing in the National School Lunch Program or School Breakfast Program, as applicable, or institutions in good standing in the Child and Adult Care Food Program are found under paragraph (e)(4) of this section.
(2) Requirements for new sponsors and sponsors that have experienced significant operational problems in the prior year. 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 § 225.15(d)(2) and (3); and
(iv) 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 § 225.15(d)(1);
(B) Perform monitoring consistent with § 225.15(d)(2) and (3), to ensure that all site operations are accountable and appropriate;
(C) Accurately classify sites consistent with paragraphs (g)(1) and (2) of this section;
(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 § 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.
(3) Requirements for experienced sponsors. Experienced sponsors must submit a management plan. At the discretion of the State agency, experienced sponsors may submit a full management plan or a simplified management plan. A full management plan must be submitted at least once every 3 years. The simplified management plan must include a certification that any information previously submitted to the State to satisfy the eligibility requirements, set forth in paragraph (d) of this section, for the sponsor, its sites, and all of its current principals is current, or that the sponsor has submitted any changes or updates to the State. This certification must address all required elements of each performance standard.
(4) Requirements for school food authorities in good standing in the National School Lunch Program or School Breakfast Program, as applicable, or institutions in good standing in the Child and Adult Care Food Program. These sponsors are not required to submit a management plan unless requested by the State agency. The State agency may request additional evidence of financial and administrative capability sufficient to ensure that the school food authority or institution has the ability and resources to operate the Program if the State agency has reason to believe that this would pose significant challenges for the applicant.
(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 and conditional non-congregate sites, 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 and conditional non-congregate sites 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 § 225.15(f);
(C) A description of the method to be used 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 sponsor 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 (including gender identity and sexual orientation), age, or disability.
(2) Hearing procedures statement. Each camp or sponsor of a conditional non-congregate site must submit a copy of its hearing procedures with its application. At a minimum, the 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 (designated representative);
(iii) The family or designated representative 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 or designated representative;
(v) Adequate notice will be given to the family or designated representative of the time and place of the hearing;
(vi) The family or designated representative will have an opportunity to present oral or documented evidence and arguments supporting its position;
(vii) The family or designated representative 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 or 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 or designated representative; 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 designated representative 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 site information sheet for each site where a food service operation is proposed. Where a non-congregate meal service operation is proposed for the first time, the sponsor must follow the requirements of this paragraph (g)(1). At a minimum, the site information sheet must demonstrate or describe the following:
(i) An organized and supervised system for serving meals to children;
(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 § 225.2, or non-rural. Documentation supporting the rural designation is required. New documentation is required every 5 years, or earlier, if the State agency determines that an area's rural status has changed significantly since the last designation;
(iv) Whether the meal service is congregate or non-congregate;
(v) Whether the site is a self-preparation site or a vended site, as defined in § 225.2;
(vi) 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;
(vii) 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;
(viii) Arrangements for food service during periods of inclement weather;
(ix) 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 5 years;
(C) When census data are used, new documentation is required every 5 years, or earlier, if the State agency determines 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 2 calendar years;
(x) 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 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 5 years; and
(C) When census data are used, new documentation is required every 5 years, or earlier, if the State agency determines that an area's socioeconomic status has changed significantly since the last census;
(xi) For NYSP sites, certification from the sponsor that all of the children who will receive Program meals are enrolled participants in the NYSP;
(xii) 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;
(xiii) 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; and
(xiv) For conditional non-congregate sites, the number of children enrolled 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 sponsor's claim for reimbursement.
(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;
(ii) Whether the site is rural, as defined in § 225.2, or non-rural. Documentation supporting the rural designation is required. New documentation is required every 5 years, or earlier, if the State agency determines that an area's rural status has changed significantly since the last designation;
(iii) Whether the meal service is congregate or non-congregate;
(iv) 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 5 years;
(C) When census data are used, new documentation is required every 5 years, or earlier, if the State agency determines 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 2 calendar years, is considered eligible without new documentation;
(v) 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 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 5 years; and
(C) When census data are used, new documentation is required every 5 years, or earlier, if the State agency determines that an area's socioeconomic status has changed significantly since the last census;
(vi) For NYSP sites, certification from the sponsor that all of the children who will receive Program meals are enrolled participants in the NYSP;
(vii) 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; and
(viii) For conditional non-congregate sites, the number of children enrolled 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 sponsor's claim for reimbursement.
(h) Approval of sites.
(1) When evaluating a proposed food service site, the State agency must ensure that:
(i) If not a camp or a conditional non-congregate site, the proposed site serves an area in which poor economic conditions exist, as defined by § 225.2;
(ii) The area which the site proposes to serve is not or will not be served in whole or in part by another site, unless it can be demonstrated to the satisfaction of the State agency that each site will serve children not served by any other site in the same area for the same meal;
(iii) The site is approved to serve no more than the number of children for which its facilities are adequate; and
(iv) If it is a site proposed to operate during an unanticipated school closure, it is a non-school site.
(2) When approving the application of a site which will serve meals prepared by a food service management company, the State agency must establish for each meal service an approved level for the maximum number of children's meals which may be served under the Program. These approved levels must be established in accordance with the following provisions:
(i) The initial maximum approved level must be based upon the historical record of the number of meals served at the site if such a record has been established in prior years and the State agency determines that it is accurate. The State agency must develop a procedure for establishing initial maximum approved levels for sites when no accurate record from prior years is available. The State agency may consider participation at other similar sites located in the area, documentation of programming taking place at the site, statistics on the number of children residing in the area, and other relevant information.
(ii) The maximum approved level must be adjusted, if warranted, based upon information collected during site reviews. If the number of meals served at the site on the day of the review is significantly below the site's approved level, the State agency should consider making a downward adjustment in the approved level with the objective of providing only one meal per child.
(iii) The sponsor may seek an upward adjustment in the approved level for its sites by requesting a site review or by providing the State agency with evidence that the number of meals served exceeds the sites' approved levels. The sponsor may request an upward adjustment at any point prior to submitting the claim for the impacted reimbursement period.
(iv) Whenever the State agency establishes or adjusts approved levels of meal service for a site, it must document the action in its files, and it shall provide the sponsor with immediate written confirmation of the approved level.
(v) Upon approval of its application or any adjustment to its maximum approved levels, the sponsor must inform the food service management company with which it contracts of the approved level for each meal service at each site served by the food service management company. This notification of any adjustments in approved levels must take place within the time frames set forth in the contract for adjusting meal orders. Whenever the sponsor notifies the food service management company of the approved levels or any adjustments to these levels for any of its sites, the sponsor must clearly inform the food service management company that an approved level of meal service represents the maximum number of meals which may be served at a site and is not a standing order for a specific number of meals at that site. When the number of children being served meals is below the site's approved level, the sponsor must adjust meal orders with the objective of serving only one meal per child as required under § 225.15(b)(3).
(3) When approving the application of a site that will provide a non-congregate meal service, the State agency must ensure that the proposed site:
(i) Meets the requirements described in paragraphs (h)(1) and (2) of this section.
(ii) Is rural, as defined in § 225.2.
(iii) Will not serve an area where children would receive the same meal at an approved congregate meal site, unless it can be demonstrated to the satisfaction of the State agency that the site will serve a different group of children who may not be otherwise served.
(iv) Serves an area in which poor economic conditions exist or is approved for reimbursement only for meals served free to enrolled children who meet the Program's income standards.
(v) Distributes up to the allowable number of reimbursable meals that would be provided over a 10-calendar day period. The State agency may establish a shorter calendar day period on a case-by-case basis and without regard to sponsor type.
(4) When approving the application of a site which will provide both congregate and non-congregate meal services, the State agency must ensure that:
(i) The proposed site meets the requirements in paragraphs (h)(1) through (3) of this section.
(ii) The proposed site will only conduct a non-congregate meal service when the site is not providing a congregate meal service.
(iii) The sponsor proposes an organized and supervised system which prevents overlap between meal services and reasonably ensures children are not receiving more than the daily maximum allowance of meals as required in § 225.16(b)(3).
(i) State-sponsor agreement. A sponsor approved for participation in the Program must enter into a permanent written agreement with the State agency. The existence of a valid permanent agreement does not limit the State agency's ability to terminate the agreement, as provided under § 225.11(c). The State agency must terminate the sponsor's agreement whenever a sponsor's participation in the Program ends. The State agency or sponsor may terminate the agreement at its convenience, upon mutual agreement, due to considerations unrelated to either party's performance of Program responsibilities under the agreement. However, any action initiated by the State agency to terminate an agreement for its convenience requires prior consultation with FNS. All sponsors must agree in writing to:
(1) Operate a nonprofit food service during the period specified, as follows:
(i) From May through September for children on school vacation;
(ii) At any time of the year, in the case of sponsors administering the Program under a continuous school calendar system; or
(iii) During the period from October through April, if it serves an area affected by an unanticipated school closure due to a natural disaster, major building repairs, court orders relating to school safety or other issues, labor-management disputes, or, when approved by the State agency, a similar cause.
(2) For school food authorities, offer meals which meet the requirements and provisions set forth in § 225.16 during times designated as meal service periods by the sponsor and offer the same meals to all children.
(3) For all other sponsors, serve meals which meet the requirements and provisions set forth in § 225.16 during times designated as meal service periods by the sponsor and serve the same meals to all children.
(4) Serve meals without cost to all children, except that camps and conditional non-congregate sites may charge for meals served to children who are not served meals under the Program.
(5) Issue a free meal policy statement in accordance with paragraph (c) of this section.
(6) Meet the training requirement for its administrative and site personnel, as required under § 225.15(d)(1).
(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 and conditional non-congregate sites, during the approved meal service time;
(ii) Without charge to children who meet the Program's income standards in camps and conditional non-congregate sites;
(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 paragraph (h)(2) of this section;
(iv) At the approved meal service time, unless a change is approved by the State agency, as required under § 225.16(c); and
(v) At the approved site, unless the requirements in § 225.16(g) are met.
(8) Submit claims for reimbursement in accordance with procedures established by the State agency, and those stated in § 225.9.
(9) In the storage, preparation and service of food, maintain proper sanitation and health standards in conformance with all applicable State and local laws and regulations.
(10) Accept and use, in quantities that may be efficiently utilized in the Program, such foods as may be offered as a donation by the Department.
(11) Have access to facilities necessary for storing, preparing, and serving food.
(12) Maintain a financial management system as prescribed by the State agency.
(13) Maintain on file documentation of site visits and reviews in accordance with § 225.15(d) (2) and (3).
(14) Upon request, make all accounts and records pertaining to the Program available to State, Federal, or other authorized officials for audit or administrative review, at a reasonable time and place. The records shall be retained for a period of 3 years after the end of the fiscal year to which they pertain, unless audit or investigative findings have not been resolved, in which case the records shall be retained until all issues raised by the audit or investigation have been resolved.
(15) For approved congregate meal service, 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 § 225.16(h) are met.
(16) Retain final financial and administrative responsibility for its program.
(j) Special Account. In addition, the State agency may require any vended sponsor to enter into a special account agreement with the State agency. The special account agreement shall stipulate that the sponsor shall establish a special account with a State agency or Federally insured bank for operating costs payable to the sponsor by the State. The agreement shall also stipulate that any disbursement of monies from the account must be authorized by both the sponsor and the food service management company. The special account agreement may contain such other terms, agreed to by both the sponsor and the food service management company, which are consistent with the terms of the contract between the sponsor and the food service management company. A copy of the special account agreement shall be submitted to the State agency and another copy maintained on file by the sponsor. Any charges made by the bank for the account described in this section shall be considered an allowable sponsor administrative cost.
(k) Food service management company registration. A State agency may require each food service management company, operating within the State, to register based on State procedures. A State agency may further require the food service management company to certify that the information submitted on its application for registration is true and correct and that the food service management company is aware that misrepresentation may result in prosecution under applicable State and Federal statutes.
(l) Monitoring of food service management company procurements.
(1) The State agency shall ensure that sponsors' food service management company procurements are carried out in accordance with §§ 225.15(m) and 225.17.
(2) Each State agency shall develop a standard form of contract for use by sponsors in contracting with food service management companies. Sponsors that are public entities, sponsors with exclusive year-round contracts with a food service management company, and sponsors that have no food service management company contracts exceeding the simplified acquisition threshold in 2 CFR part 200, as applicable, may use their existing or usual form of contract, provided that such form of contract has been submitted to and approved by the State agency. The standard contract developed by the State agency shall expressly and without exception provide that:
(i) All meals prepared by a food service management company shall be unitized, with or without milk or juice, unless the State agency has approved, pursuant to paragraph (l)(3) of this section, a request for exceptions to the unitizing requirement for certain components of a meal;
(ii) A food service management company entering into a contract with a sponsor under the Program shall not subcontract for the total meal, with or without milk, or for the assembly of the meal;
(iii) The sponsor shall provide to the food service management company a list of State agency approved food service sites, along with the approved level for the number of meals which may be claimed for reimbursement for each site, established under § 225.6(h)(2), and shall notify the food service management company of all sites which have been approved, cancelled, or terminated subsequent to the submission of the initial approved site list and of any changes in the approved level of meal service for a site. Such notification shall be provided within the time limits mutually agreed upon in the contract;
(iv) The food service management company shall maintain such records (supported by invoices, receipts, or other evidence) as the sponsor will need to meet its responsibilities under this part, and shall submit all required reports to the sponsor promptly at the end of each month, unless more frequent reports are required by the sponsor;
(v) The food service management company must have State or local health certification for the facility in which it proposes to prepare meals for use in the Program. It must ensure that health and sanitation requirements are met at all times. In addition, the food service management company must ensure that meals are inspected periodically to determine bacteria levels present in the meals and that the bacteria levels found to be present in the meals conform with the standards set by local health authorities. The results of the inspections must be submitted promptly to the sponsor and to the State agency.
(vi) The meals served under the contract shall conform to the cycle menus and meal quality standards and food specifications approved by the State agency and upon which the bid was based;
(vii) The books and records of the food service management company pertaining to the sponsor's food service operation shall be available for inspection and audit by representatives of the State agency, the Department and the U.S. Government Accountability Office at any reasonable time and place for a period of 3 years from the date of receipt of final payment under the contract, except that, if audit or investigation findings have not been resolved, such records shall be retained until all issues raised by the audit or investigation have been resolved;
(viii) The sponsor and the food service management company shall operate in accordance with current Program regulations;
(ix) The food service management company shall be paid by the sponsor for all meals delivered in accordance with the contract and this part. However, neither the Department nor the State agency assumes any liability for payment of differences between the number of meals delivered by the food service management company and the number of meals served by the sponsor that are eligible for reimbursement;
(x) Meals shall be delivered in accordance with a delivery schedule prescribed in the contract;
(xi) Increases and decreases in the number of meals ordered shall be made by the sponsor, as needed, within a prior notice period mutually agreed upon;
(xii) All meals served under the Program shall meet the requirements of § 225.16;
(xiii) In cases of nonperformance or noncompliance on the part of the food service management company, the company shall pay the sponsor for any excess costs which the sponsor may incur by obtaining meals from another source;
(xiv) If the State agency requires the sponsor to establish a special account for the deposit of operating costs payments in accordance with the conditions set forth in § 225.6(j), the contract shall so specify;
(xv) The food service management company shall submit records of all costs incurred in the sponsor's food service operation in sufficient time to allow the sponsor to prepare and submit the claim for reimbursement to meet the 60-day submission deadline; and
(xvi) The food service management company shall comply with the appropriate bonding requirements, as set forth in § 225.15(m)(5) through (7).
(3) All meals prepared by a food service management company shall be unitized, with or without milk or juice, unless the sponsor submits to the State agency a request for exceptions to the unitizing requirement for certain components of a meal. These requests shall be submitted to the State agency in writing in sufficient time for the State agency to respond prior to the sponsor's advertising for bids. The State agency shall notify the sponsor in writing of its determination in a timely manner.
(4) Each State agency shall have a representative present at all food service management company procurement bid openings when sponsors are expected to receive more than $100,000 in Program payments.
(5) Copies of all contracts between sponsors and food service management companies, along with a certification of independent price determination, shall be submitted to the State agency prior to the beginning of Program operations. Sponsors shall also submit to the State agency copies of all bids received and their reason for selecting the food service management company chosen.
(6) All bids in an amount which exceeds the lowest bid shall be submitted to the State agency for approval before acceptance. All bids totaling $100,000 or more shall be submitted to the State agency for approval before acceptance. State agencies shall respond to a request for approval of such bids within 5 working days of receipt.
(7) The contract between a sponsor and food service management company shall be no longer than 1 year; and options for the yearly renewal of a contract may not exceed 4 additional years. All contracts shall include a termination clause whereby either party may cancel for cause or for convenience with up to 60-day notification.
(8) Failure by a sponsor to comply with the provisions of this paragraph or § 225.15(m) shall be sufficient grounds for the State agency to terminate participation by the sponsor in accordance with § 225.18(b).
(m) Meal pattern exceptions. The State agency shall review and act upon requests for exceptions to the meal pattern in accordance with the guidelines and limitations set forth in § 225.16.