CINDY LONG DIRECTOR, CHILD NUTRITION DIVISION USDA/STATE AGENCY BIENNIAL CONFERENCE WILLIAMSBURG, VA NOVEMBER USDA Updates

Direct Certification Benchmarks and Continuous Improvement Plans Zero Benefit Households State Performance Awards Grants to States Direct Certification with Medicaid Demonstrations

Benchmarks and Continuous Improvement Plans 3  Benchmarks set for State direct certification rates with SNAP, beginning at 80% for School Year  States not meeting benchmarks each year must implement Continuous Improvement Plans (CIPs) to improve rates for the next school year  States will be notified if they need a CIP beginning Fall 2012  Goal is for States to reach 95% and maintain at least this level. Is phased in over three years.

Direct Certification State Performance Awards 4 General Information Total # of Awards/yr Total $ amt /yr Categories of awards Timing of Awards Up to 15 awards per year, for each of three years $4 million per year for performance awards, for each of three years Two categories: Outstanding Performance and Significant Improvement Awards will be given: Sept Sept Sept Additional Guidance Further guidance will be issued in Spring 2012, 2013, and 2014 to remind States of these award opportunities and to give more-specific information about the award process for the given year.

Implementation 5 Direct Certification Benchmarks and Continuous Improvement Plans  FNS Memorandum SP (April 28, 2011)  Proposed Rule - Winter 2012  Final Rule - Winter 2013 Direct Certification Performance Awards and Use of Funds  FNS Memorandum SP (April 28, 2011)

Direct Cert and Zero Benefit Households Memo issued October 26, 2011 (SP ) Clarifies that households eligible for “zero benefits” in SNAP are not considered “receiving benefits” for purposes of direct certification CN State agencies should coordinate with their State SNAP agencies to ensure their direct certification lists do not include zero benefit households

Direct Certification Grants to States New Opportunities to Apply  Planning Grants: January 2012 and April 2012  Implementation Grants: April 2012 and July 2012 Eligibility for grants has been expanded to all States with direct certification rates less than 95 percent  Based on rates in 2011 Report to Congress  Encompasses all but 3 States

Direct Certification with Medicaid Demonstration Projects in selected States and SFAs Phased in starting with School Year Purpose of demonstration:  To determine potential of direct certification with Medicaid to:  Reach eligible, uncertified children  Directly certify children who are free based on an application  To provide an estimate of the effect on Federal costs and participation

Direct Certification with Medicaid Request for Applications released September 2, 2011 Applications due to FNS by December 5, 2011 States may apply in three categories:  Category DC-M1 -- Selected local educational agencies (LEAs) in selected States  Category DC-M2 -- Statewide in selected States  Other Proposed Projects --To be determined

Direct Certification for Children Receiving Medicaid Benefits DC-M2 Project Year Selection SY Beginning July 1, 2012 Select 1 to 3 States for statewide projects SY Beginning July 1, 2013 Based on outcomes in previous year SY Beginning July 1, 2014 and later Based on outcomes in previous year(s) 10 Site Selection for Statewide Projects (DC-M2)

Community Eligibility  Section 104(a): Universal Meal Service in High Poverty Areas.  Intent: Provide an alternative to paper applications for claiming reimbursements in school food authorities serving a high percentage of “identified students”. 11

Community Eligibility Overview  Eligible LEAs/schools agree to serve all students free lunches and breakfasts for 4 successive school years. The percentage of identified students must be greater than or equal to 40% to qualify. Identified students are those primarily directly certified due to the household’s receipt of SNAP benefits.  Total number of meals served is counted.  Reimbursement is based on the percentage of identified students multiplied by a factor of

Community Eligibility Implementation  Phased in over 3 years: Currently: Illinois, Kentucky, and Michigan. All eligible LEAs and schools in these States can participate. Years 2 and 3: 4 States added each year (July 1, 2012 and July 1, 2013) All eligible LEAs and schools nationwide beginning July 1,

Community Eligibility Timeline  Request for State interest for School Year expected in January All States will be eligible to apply  Proposed rule in Fall 2012  Final rule in December 2013  Full implementation (all States) in July

Categorical Eligibility of Foster Children  Section 102: Categorical eligibility of foster children  Extends categorical eligibility to any foster child whose care and placement is the responsibility of the State or who is placed by a court with a caretaker household.  Implementation memo - January 31, 2011 (SP )  Questions and Answers - March 16, 2011 (SP )  Guidance on verification and reporting - October 24, 2011 (SP )

Privacy Protection Section 301: Privacy Protection Intent: Increase Privacy Protection  May not require full SSN for verification  Only require the last four digits of SSN on application Implementation memo – February 15, 2011 (SP )

Free/Reduced Price Eligibility Manual Issued October 2011 Updated to include new provisions that affect eligibility:  Categorical eligibility of foster children  Collection and use of social security numbers  Clarifications on categorical eligibility  Direct Certification – use of letter method, extension of eligibility to all members of a household  Limited English Proficiency  Transfer of Eligibility between SFAs

Free and Reduced Price Applications Updated translations of the Free and Reduced Price Application and related materials posted on the FNS website in August  33 languages

Free/Reduced Price Applications Rule Final rule published in the Federal Register on October 28, 2011 Most provisions from 2004 Reauthorization Key provisions:  Year-long eligibility  Elimination of temporary approvals  Requirements for communications with Limited English Proficiency households FNS is preparing LEP Guidance which will consolidate and clarify all LEP requirements.

Outreach to Eligible Families Section 112 : Outreach to Eligible Families Intent:  To increase participation in the federal feeding programs.  To reach eligible families to inform them of the Summer Food Service Program (SFSP) available during the summer months and remind households of the availability of the School Breakfast Program (SBP).

Outreach Implementation SFSP requirement: Implementation Memo – January 25, 2011 (SFSP , SP ) SBP requirement: Implementation Memo – June 20, 2011 (SP )

LEA High Risk Indicator Tool Monitoring tool to assist State agencies in the identification of LEAs that demonstrate high risk factors for certification errors. Web-based tool will provide State CN directors with information needed to identify LEAs for “Additional Administrative Reviews” (SP ). Tool will estimate a risk score for each LEA using models based on high risk indicators of certification errors. 22

LEA High Risk Indicator Tool The tool will produce interactive reports that rank LEAs with each State according to their risk factors for certification error. Updated data will be uploaded to the tool each year to provide current risk assessments. Prototype of tool is currently being reviewed by FNS. Next steps are under consideration. 23

Funding Available: $4 million per year Purpose: Grants to States to perform administrative reviews and training for LEAs with high risk of administrative error in the programs. In 2009, FNS took a new direction to encourage States to apply for ART grants and to respond to State needs for technology improvements  Method I ART Grants  Streamlined application process to allow 1-page application for funds specifically to conduct additional administrative reviews  States could apply for up to $3,500 per SFA review 24 Administrative Review & Training (ART) Grants

Method II ART Grants – Competitive Opportunity  Expanded scope to 3 special project categories, including technology improvements  Training of SFA administrative personnel on application, certification, verification, meal counting & claiming, including web-based training  Technology improvements for State level activities such as data analysis tools and web-based training  Oversight and training focused on nutritional quality of meals  Next request for applications to be released approximately January Administrative Review & Training (ART) Grants

Indirect Costs  Section 307: Indirect Costs  Intent: Issue guidance to SFAs on program rules pertaining to indirect costs, and study the extent of indirect costs paid 26

Indirect Cost Overview Guidance was released July 7, 2011, and addresses program rules pertaining to indirect costs Study will assess extent to which indirect costs are charged The law also provides USDA the authority to issue regulations based on the results of the study 27

Indirect Cost Guidance Guidance includes:  Definitions for direct and indirect costs, including the proper classification of costs and treatment of certain typical costs in the NSLP and SBP  Criteria to aid SFAs in determining allowable costs  Examples of typical costs treated as allowable or unallowable  Considerations for SFAs when assessing indirect costs charged to the nonprofit school food service account 28

Procurement Training FNS created a web-based procurement training available online through the National Food Service Management Institute (NFSMI) at the following web address: This training tool provides State agencies with a better understanding of how to best perform responsibilities in the area of SFA procurements, and provides information on the Federal procurement process requirements, particularly the requirement for free and open competition.

Procurement Training The web-based training is comprised of 3 topic areas:  Topic 1 - general overview of procurement  Topic 2 - detailed account of the process that school food authorities should engage in when they are planning for, soliciting, awarding a competitive procured contract and managing the contract after the contract award. Topics 1 and 2 are complete and available on-line

Procurement Training FNS is currently developing Topic 3  Will provide information on food service management company contracts and indirect costs. Topic 3 is expected to be available in Summer 2012.

OIG – National FSMC Audit  Focus on FSMC Contracts and Accounting/Return of Rebates, Discounts, Credits  FNS met with OIG staff in October  Fieldwork will take place over next several months; locations TBD  FNS provided OIG with a list of State agency contacts and an initial information on SFAs with cost reimbursable contracts;  Late October/early November OIG began contacting State agencies directly to identify SFA's with FSMC contracts and to seek State agency input on the value of those contracts.

New Meal Patterns and Performance-Based Reimbursement 33 Section 201: Performance-based reimbursement rate increases for new meal patterns Intent:  To improve the diets of children by issuing regulations to update the school meal patterns and nutrition standards based on Institute of Medicine recommendations  To provide additional 6 cents reimbursement to SFAs that comply with the final regulation

Proposed Meal Patterns Rule 34 Proposed Rule: Nutrition Standards in the National School Lunch and School Breakfast Programs  Issued January 13, 2011; Federal Register (76 FR 2494);  90-day comment period ended April 13, 2011  Over 133,000 public comments received  Comments posted on (See public submissions under docket FNS )

Final Meal Patterns Rule Final Rule expected early in 2012 Final rule provisions will comply with 2012 Appropriations requirements:  Tomato paste and puree crediting  Sodium requirements after initial target  No maximum limits on service of vegetables (i.e., starchy vegetables)  Definition of whole grain

Certification of Compliance with New Meal Patterns Additional 6 cents per lunch performance-based reimbursement becomes available October 1, 2012 Standards will be established for State agencies to certify if SFAs meet final rule requirements  Interim rule expected shortly after final meal pattern rule

State Funding $50 million per year, for each of two years, will be provided to State agencies to support implementation activities  Funding first becomes available in the fiscal year the final meal pattern rule is published (expected FY 2012)  Allocation to States is based on SAE formula  FNS may reserve $3 million each year to support Federal costs  Funds may be used for State activities related to training, technical assistance, certification and oversight activities for the new meal pattern implementation

State Focus for School Year SFA compliance with requirement to offer a variety of fluid milk consistent with the Dietary Guidelines  For SY , two types of plain or flavored low-fat and fat-free milk may be offered to meet the requirement  Final rule will address flavored milk SFA compliance with requirement to make free potable water available where meals are served Training and technical assistance to SFAs on new meal patterns Preparation for certification activities

Nutrition Standards For All Foods Sold in Schools Section 208: Nutrition Standards for all Foods Sold in Schools (“Competitive Foods”) Intent: requires the Secretary to promulgate regulations to establish nutrition standards for foods sold in schools other than reimbursable meals

Overview of Requirements for Standards Apply to food items available for sale on the school campus throughout the school day In developing standards, USDA must consider:  Scientific recommendations for standards  Existing voluntary standards for beverages and snack foods  Existing State and local standards  Practical application of the standards  Exemptions for infrequent school-sponsored fundraisers

Nutrition Standards for All Foods Implementation 41 Proposed rule expected Winter 2012 Law requires implementation of the standards to occur no earlier than one year after an interim or final rule is published, but not more than two years after publication

Local Wellness Policies (LWP)  Section 204: Local School Wellness Policy Implementation  Section 209: Information for the Public on the School Nutrition Environment  Intent:  Strengthen local wellness policies so they become useful tools in evaluating, establishing and maintaining healthy school environments  Provide transparency to the public on key areas that affect the nutrition environment in each school 42

Local Wellness Policy Overview USDA must publish regulations that provide a framework and guidelines for local wellness policies, including:  Goals for nutrition promotion and education, physical activity and wellness  Guidelines to promote health and reduce obesity  Requirements for certain groups to participate in the development, implementation, periodic review and update of LWPs. Local Education Agencies (LEAs) determine specific policies appropriate for their schools LEAs required to inform and update the public on the content, implementation, and assessment of LWPs 43

Local Wellness Policy Implementation Issued Implementation Memo – July 2011 (SP ) Developed Technical Assistance Activities Plan with CDC and ED – September 2011 Will coordinate with ED on school nutrition environment reporting during development of proposed rule

LWP Implementation During School Year LEAs should begin reviewing and updating their existing LWPs Begin moving forward on implementing the new requirements, to the extent practicable Consult LWP reference materials on FNS website: healthy/wellnesspolicy.html and CDC website: outh/npao/wellness.htm healthy/wellnesspolicy.html outh/npao/wellness.htm Review strategies to facilitate LWPs as outlined in CDC’s School Health Guidelines to Promote Healthy Eating and Physical Activity ( youth/npao/strategies.htm) youth/npao/strategies.htm Inform and update the public about the content, implementation, and assessment of LWPs by end of SY

LWP Timeline Proposed Rule - Fall 2012 Provide technical assistance materials throughout implementation of this provision Final Rule - Fall

HUSSC Status – add 1 slide

Professional Standards-Section 306 USDA will establish standards for the following groups: State Directors  Selection criteria and standards School Foodservice Directors  Requirements for education, training and certification School Foodservice Personnel  Requirements for training and certification Professional Standards

Form a committee for input on appropriate standards, training, etc. Proposed Rule Enter into contracts for development of training and for ongoing certification of directors and personnel Final Rule Implementation and compliance Professional Standards--Tasks to be Completed

School Food Service Account Revenue Provisions Section 205: Equity in School Lunch Pricing Section 206: Revenue from Nonprogram Food Sold in Schools Intent: To ensure that sufficient funds are provided to the nonprofit school food service account for paid lunches and nonprogram foods

Paid Lunch Equity Requirement Requires school food authorities to provide the same level of financial support for “paid” lunches as is provided for “free” lunches.  Requirement can be met by gradual price increases or by adding non-Federal funding to the nonprofit school food service account.

Nonprogram Foods Revenue Requirement Total revenue nonprogram foods > Cost of obtaining nonprogram foods Total revenue food service accountCost of obtaining prg + nonprg foods If nonprogram food is purchased by the SFA, all revenue must accrue back to the school food service account

Nonprogram foods include:  All foods sold outside of program meals; and  Purchased with funds from the nonprofit school food service account Includes competitive foods as currently provided in regulations Nonprogram Foods Revenue Requirement (cont.)

School Food Service Account Revenue Implementation Provisions became effective July 1, 2011 Paid Lunch Equity Fact Sheet issued March 2, 2011 Interim rule published June 17, Questions and Answers issued June 13, 2011, and October 24, 2011 (SP )

Paid Lunch Equity Tool 55 A PLE tool is available on the FNS website. The tool helps SFAs calculate:  Average price across the SFA  New required average price across SFA  Distribution of price increases across SFA  Non-Federal source contribution amount

Nonprogram Food Revenue Tool A Nonprogram Food Revenue Tool is available on the FNS website to assist SFAs as they determine compliance with Section 206 The tool will calculate:  The minimum portion of revenue from nonprogram food  The minimum revenue required from the sale of nonprogram food  The amount of additional revenue from nonprogram food sales needed to meet requirement

Paid Lunch Equity Reporting Law requires annual reporting of SFA paid lunch prices by the State agency to FNS FNS must publish the reported prices on its website Interim rule requires reporting to FNS by November 30 each year. Due date for reporting this year will be February 28,  Memo and suggested reporting format will be issued shortly  SFAs report “most frequently charged price” at elementary, middle, high school levels

Farm to School  Section 243: Access to Local Foods: Farm to School Programs  Intent: To fund competitive grants for Farm to School related activities and provide technical assistance 58

Farm to School Grants Overview  Grants may be used for training, supporting operations, planning, purchasing equipment, developing school gardens, developing partnerships and implementing Farm to School activities  Eligible Entities: schools, State and local governments, Indian Tribal Organizations, Ag producers or groups of Ag producers, and nonprofit organizations  Matching support from grantee required  Evaluation component must be included in grant  Individual grants are not to exceed $100,000  Funding: $5 million each year beginning in October

Farm to School Grants Timeline Request for Applications Spring 2012 Grants awarded when funding becomes available (October 2012) Updates will be posted to the USDA Farm to School website: 60

USDA Economic Research Service (ERS) Farm to School “Census” Collaboration with Occidental College and the National Farm to School Network Establish National baseline data for Farm to School Census estimated release in January 2012  Online collection Disseminated thru State agency (SA) offices to School Food Authorities  Asking for SA assistance in disseminating information  FNS will post two reminder notices thru PartnerWeb to help increase response rate

Fresh Fruit and Vegetable Program Proposed Rule  Currently in clearance  Codifies requirements for program operations  Publication expected soon

Rural Development Community Facilities Program CF program provides low-interest loans and grants to public entities in rural areas Can be used for equipment/renovation to improve access to healthy, locally or regionally-grown products Projects must benefit entire community

CRE Guidance FNS is currently updating the Coordinated Review Effort (CRE) Guidance Updates include:  Input from recent FNS/State Agency Workgroup on Provision 2 and Provision 3, Year-Round Schools, and Fiscal Action Procedures  Changes required by some provisions of the Healthy, Hunger- Free Kids Act for local wellness policies, paid lunch equity, revenue from nonprogram foods, milk and water. Expected to be available in December Yearly updates planned.

Full Use of Federal Funds  Section 361: Full Use of Federal Funds. Intent: P rovide expectations for the use of Federal funds supporting the administration of programs authorized under the National School Lunch Act or the Child Nutrition Act of Effective October 1, 2010

Full Use of Federal Funds Overview Federal funds provided to State agencies for the administration of the CNP must not be subject to State budget restrictions or limitations. This includes hiring freezes, work furloughs, and travel restrictions. Requires that the Federal/State Agreement include a provision that supports full use of Federal funds and excludes such funds from State budget restrictions.

Full Use of Federal Funds Implementation February 2011 Implementation Memo (SP )  Includes addendum to Federal/State Agreement Questions and Answers – March (SP ) and May 2011 (SP ) FNS will continue to work with State agencies that have not come into compliance

CACFP At-Risk Afterschool Care Meals  Available in all States as of October 1, 2010  States should be promoting the availability to potential sponsors Updates to CACFP Meal Patterns  IOM Report issued November 2010  FNS solicited input from CACFP Stakeholders and is developing proposed rule  Expected publication in Summer 2012 CACFP Proposed Rule  Miscellaneous provisions from HHFKA  one-time applications, homes times rates as the only calculation for administrative reimbursements to sponsors of family day care homes, carryover, and others  Publication expected Spring 2012

Summer Food Service Program Continued focus on increasing participation and simplifying program management and operations Recent SFSP policy memoranda Simplified Application Procedures Offer vs. Serve Approval of Sites Located Outside of the State Additional State Requirements Eligibility based on Census Data Additional Foods

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