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Comment Request - Assessing the Child Nutrition State Administrative Expense Allocation Formula

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In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on this proposed information collection. This collection is a new collection. The primary purpose of this study is to assess the effectiveness of the current formula used for state administrative expense (SAE) allocations for child nutrition programs, identify and examine factors that influence state spending, and develop and test a range of possible alternatives to improve the SAE allocation formula.

USDA's Food and Nutrition Service (FNS) administers child nutrition programs (CNPs) that provide healthy food to children including the National School Lunch Program (NSLP), School Breakfast Program (SBP), Child and Adult Care Food Program (CACFP), Special Milk Program (SMP), and the food distribution program (FDP) for schools. State agencies are responsible for oversight and administration of the CNPs, including monitoring program operations and distributing federal cash reimbursements and USDA Foods. CNPs are operated by a variety of local public and private providers that enter into agreements with state agencies, including school food authorities, local government agencies, nonprofit sponsoring organizations, child care centers, and adult care centers, among others.

State agencies that administer these CNPs include Education, Agriculture, Health, and Human Services and Social Services agencies. In some states, all of these CNPs are administered by one state agency (Education or Agriculture), while in other states two or more agencies administer these programs. For example, in several states the agency that administers the FDP for schools is different than the agency that administers the other CNPs.

States receive child nutrition state administrative expense (SAE) funds from the federal government to help cover their administrative costs.[1] SAE funds are appropriated annually to USDA FNS under the authority of Section 7(a) of the Child Nutrition Act of 1966 (the Act).[2] The Act sets forth the total amount of funds available for SAE and a formula for allocating the majority of the funds to states—commonly referred to as the “nondiscretionary” allocation. It also provides USDA with authority to decide how to allocate remaining funds, i.e., the “discretionary” allocation. Program regulations at 7 CFR 235.4 include the statutory allocation formula as well as the formula USDA adopted for discretionary allocation of the funds. The Act also sets funds availability at two years, authorizes a reallocation process for unused funds, and requires a state plan for use of the funds, approved by FNS. SAE funds can be spent on reasonable, allocable, and necessary expenses incurred by the state including, but not limited to, salary and benefits, staff training, office equipment, support services, travel, monitoring and technical assistance activities. Funds that are not used by a state are returned for reallocation to other states; by law, no more than 20 percent of the initial allocation may be carried over by a state to the next fiscal year. Finally, the Act imposes a “State Funding Requirement,” under which states must contribute no less than their level of contribution in Fiscal Year 1977 to the SAE budget.

FNS is conducting a study, Assessing the Child Nutrition State Administrative Expense Allocation Formula, to assess the effectiveness of the current formula used for SAE allocations, identify and examine factors that influence state spending of SAE funds, and develop and test a range of possible alternatives to improve the SAE allocation formula. The study approach includes a review of historical spending and allocation patterns, case studies of 12 states, and an assessment of alternative formulas. In each state selected for case study, directors and key staff from all state agencies that receive SAE funds will be included.

06/07/2017