USDA FOODS 102 USDA FOODS 102 More Choices For You. More Options for Them. A USDA Foods Program Discussion Based Training for Child Nutrition Professionals USDA State Agency Meeting November 2-6, 2015 Arlington, VA

Mary Beth Flowers, SNS, Training Coordinator Nutrition Access and Services Branch Kathleen Staley, Chief Program Integrity and Monitoring Branch Carolyn Smalkowski, Program Analyst Policy Branch Kiley Larson, Program Analyst Policy Branch Table Moderators: Kathleen Staley, Chief Program Integrity and Monitoring Branch Julie Skolmowski, MS, RD, SNS, Chief Nutrition Access and Services Bra nch LaNae Potter, Program Analyst Child Nutrition Operations Branch Linda Hubeny, Program Analyst Program Integrity and Monitoring Branch Food Distribution Presenters:

Presentations: USDA Foods Processing Utilizing State Administrative Expenses (SAE) Funds Table Topic Discussions: Processing Inventory Management Warehousing Bids & Contracts Procurement Forecasting Maximizing SAE Funds Agenda

USDA Foods Processing

Types of Agreements Steps of Processing Program Roles & Responsibilities Value Pass through Systems Manage Inventory

Types of Agreements National Processing Agreement State Agreement Recipient Agency Agreement

Steps of Processing Program Decide to Process Choose VPT Agreement Monitor Inventory

Roles & Responsibilities USDA Approve:  National Processor Agreements (NPA)  End Product Data Schedule (EPDS)  Summary End Product Data Schedules (SEPDS) Determine NPA bond level Monitor Monthly Performance Reports Monitor & enforce 6-month inventory level Review independent audits of NPA processors

Roles & Responsibilities State Offer variety USDA Foods - demand driven system Determine Value Pass through System (VPT) Sign participation agreements - NPA processors Enter into agreements in-state processors Communicate list of processors to RAs Review monthly performance reports Monitor & enforce 6-month inventory level

Roles & Responsibilities Processor Enter into NPA and/or state agreement Provide inventory protection – surety bond/ letter of credit Provide SEPDS to states Bill RAs using state approved VPT method Conduct monthly sale verifications Provide monthly performance reports Monitor 6-month inventory level

Roles & Responsibilities Recipient Agency (RA) Plan menus Determine USDA Foods & quantities to request Develop & award bids for processing Monitor orders to processor drawdown of inventory Review invoices to verify VPT Signed agreement - if using distributor to store & deliver USDA Foods

Value Pass through System Rebates Fee-for-Service Net Off Invoice

Monitor Inventory Monitor Monthly Performance Report 6 month inventory limit

Resources USDA Foods Processing webpage Webinar: USDA Foods Processing USDA Foods Processing Regulations American Commodity Distribution Association (ACDA) website School Recipient Agency Processing Handbook

Kiley Larson & Carolyn Smalkowski Program Analysts, Policy Branch Food Distribution Division Utilizing State Administrative Expense (SAE) Funds for Food Distribution Expenses

Federal funds for State administrative expenses Can be used for both one-time and recurring costs May cover State-level storage and distribution of USDA Foods Can be transferred in-State for Child Nutrition Program State agencies SAE Funds Utilization

Allowable uses of SAE funds include, but are not limited to: 1.Costs for attendance at conferences and trainings 2.State-contracted warehouse fees 3.Salaries and fringe benefits 4.Costs for leasing office or warehouse space 5.The purchase, rental, or maintenance of equipment or vehicles ***Communication is key! Administering and distributing agencies must discuss unmet funding needs before SAE money is returned to FNS.*** SAE Funds Utilization

State agencies are encouraged to use SAE funds, to the maximum extent allowable and practicable, to minimize the charges imposed on school food authorities (SFAs) for the storage and distribution of USDA Foods, and related administrative costs. SAE Funds Utilization

SAE reallocation process to request/return funds Intended to fund needed non-routine administrative activities or special projects, and allowable administrative expenses with justification. Annual process with funds expended by September 30 of the following year May only be used for the purpose for which they were approved SAE Reallocation Funds Utilization

Allowable uses of SAE reallocation funds include, but are not limited to: 1.State exchange activities 2.Development of training materials 3.Repair of a State-owned facility 4.Non-routine staff development 5.Rolling down WBSCM or electronic food ordering system to SFAs SAE reallocation funds may not be used for (includes but are not limited to): 1.Retroactive payments 2.Replacement/Substitution of other Federal funds SAE Reallocation Funds Utilization

Total amount of unobligated SAE funds carried over into 2 nd FY cannot exceed 20% of the State’s initial SAE allocation. Carryover limit does not increase with the receipt of SAE reallocation and/or transfer funds. SAE and SAE Reallocation Funds – Carryover Limitation

EXAMPLE: Initial FY15 SAE allocation: $1 million + FY15 SAE Reallocation funds: $100,000 = $1.1 million in total FY15 SAE funding Carryover limit: $200,000 (20% of $1 million) Unobligated funds at end of FY15: $250,000 Amount returned to FNS: $50,000 SAE and SAE Reallocation Funds – Carryover Limitation

Q: Is there a limit to the amount of SAE reallocation funds a State agency can apply for? A: No. However, available funding varies annually. Frequently Asked Questions

Q: If the State-contracted warehouse directly invoices SFAs for the costs of intrastate storage and distribution of USDA Foods, can SAE funds be used to pay for these costs? A: Yes, but SAE funds must only be used for State- level costs. Frequently Asked Questions

For more information, refer to: 7 CFR Part 235 Policy Memorandum FD-131: Questions & Answers regarding the use of SAE funds and SAE reallocation funds in the Food Distribution Program for Child Nutrition Programs ( Annual Reallocation of SAE Funds in Child Nutrition Programs memorandum ( Resources

Processing Inventory Management Warehousing Bids & Contracts Procurement Forecasting Maximizing SAE Funds Table Topics: 30 minutes each

USDA Foods Questions/feedback:

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