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FY 2017 Reallocation of SAE Funds in Child Nutrition Programs

EO Guidance Document #
FNS Document #
SP18 CACFP07-2017
Resource type
Policy Memos
Guidance Documents
Resource Materials
PDF Icon Policy Memo (171.19 KB)
DATE: February 27, 2017
SUBJECT: Fiscal Year (FY) 2017 Reallocation of State Administrative Expense (SAE) Funds in Child Nutrition Programs
TO: Regional Directors
Special Nutrition Programs
All Regions
State Directors
Child Nutrition Programs
All States

This memorandum and attachments provide the information needed to conduct the FY 2017 reallocation of SAE funds. Reallocation is a formal process by which state agencies can: (1) request additional SAE funds above their initial authorized funding level; or (2) return SAE funds they do not need.

At this time, all state agencies must also submit an SAE Funds Reallocation Report (FNS-525) to their respective USDA Food and Nutrition Service (FNS) regional office, even if the state agency is neither requesting nor returning funds. Prior to submitting a FNS-525 which indicates a return of SAE funds, state child nutrition program (CNP) staff, as applicable, must work together to ensure that all SAE needs have been met by all program areas. State agencies should discuss with their respective FNS regional offices how to transfer any available excess SAE funds to other agencies within their state (e.g., to the state food distribution program for CNPs), if applicable. Should a return of excess funds continue to be required, the state agency must indicate in its FNS-525 submission to the FNS regional office, in the cover email, that there is no need for such funds for the state CNPs, including all applicable program areas.

State agencies may request SAE reallocation funds for any allowable expense associated with the administration of the CNPs including related food distribution programs, as described under 7 CFR 235.6. Therefore, with justification, allowable expenses include general administrative expenses as well as special one-time only projects that will increase the integrity, effectiveness and/or efficiency of the administration of the CNPs. However, if funds are awarded for activities that will continue beyond the grant period, state agencies must provide a plan for how the activities will be funded after the grant period ends.

In FY 2017, FNS strongly encourages states to consider requesting funds for training and technical assistance on the new Child and Adult Care Food Program (CACFP) meal pattern. In order for the implementation of the CACFP meal pattern changes to be successful, additional technical assistance for program operators will be required. FNS will give high priority to requests for funds for CACFP meal pattern training projects that are likely to lead to greater program integrity, efficiency and/or effectiveness. If applicable, states with multiple agencies administering child nutrition programs must ensure SAE reallocation funds for CACFP meal pattern trainings are transferred to the appropriate administering agency.

FNS also continues to encourage state agencies to request funds for “state exchange” activities. The purpose of a state exchange is to facilitate the sharing of information and resources between states and encourage state agency peer-to-peer communication. Therefore, SAE reallocation funds may be used to facilitate short term exchange opportunities, such as site visits to other state child nutrition agencies, interstate meetings, or presentations between staff from two or more state agencies. The goal is to share administrative techniques and resources that improve program integrity, effectiveness, and compliance in response to the many changes brought about by the Healthy, Hunger Free Kids Act of 2010 as well as other CNP priorities.

State agencies must ensure that the total amount of SAE funds (initial allocation plus reallocation and transfers) carried over into FY 2018 does not exceed 20 percent of the FY 2017 initial SAE allocation. Additionally, the availability of SAE reallocation funds in future years cannot be guaranteed. Requests must focus on needed projects or activities that are not dependent on receiving future SAE reallocation funds. 

The following Attachments A-D are included with this memorandum:

  • Attachment A, SAE Reallocation Guidelines, provides details about calculating carryover, state exchange activities, and other major considerations.
  • Attachment B, Roles and Responsibilities, explains the duties of state agencies, and FNS regional and national offices for conducting the reallocation of SAE funds.
  • Attachment C, Guidance for ITS Procurement, contains information to assist state agencies with determining their information technology and system needs and capacity so that they may prepare appropriate requests.
  • Attachment D, SAE Reallocation Request, is to be filled out by the regional office for each recommended request.

By March 28, 2017, state agencies must submit requests for SAE reallocation funds to their respective FNS regional office. Regional offices will evaluate the need for each request and recommend for approval, in ranking order, projects or activities that demonstrate that they will increase the integrity, efficiency, and/or effectiveness of the administration of the CNPs. Requests that have no other alternative funding source available (i.e., grants, CACFP Audit funds, HHFKA Section 201 funds, or other) should be given preference.

By April 18, 2017, FNS regional offices must submit to the national office: 

  1. FNS-525s for all state agencies (forms that are not signed and dated and that do not have the accurate FY and authorized funding levels may delay reallocation);
  2. Each state agency’s SAE reallocation request recommended for approval; and
  3. FY 2017 SAE Reallocation Request (Attachment D) for each recommended request.

After April 18, 2017, the national office will begin the review and approval process for awarding FY 2017 SAE reallocation funds. If requests are not received at the national office by this date, they may not be considered. Unless additional information is needed from the state agency or the regional office, the national office will notify regional offices of the SAE reallocation awards in May 2017.

Below are key dates associated with the reallocation process.

  • March 28, 2017 state agencies submit SAE reallocation requests and FNS-525s to regional offices.
  • April 18, 2017 regional offices submit to national office: All FNS-525s; recommended SAE reallocation requests, and Attachment Ds.
  • May 2017 national office notifies regional offices of SAE reallocation results.
  • Sept 30, 2017 End of first year of FY 2017 SAE funds grant period. State agencies are allowed to carry over an unobligated amount no greater than 20 percent of the initial FY 2017 SAE funds allocation into FY 2018.
  • Sept 30, 2018 End of FY 2017 SAE funds grant period. All FY 2017 SAE funds (initial allocation plus reallocation and transfers) must be obligated and expended.

Regional offices should send all forms and requests via e-mail to the CN State Systems mailbox at Please be sure the subject line contains “FY2017 SAE Reallocation – [add region and state(s) name].”

State agencies with questions should contact the appropriate FNS regional office.

Sarah E. Smith-Holmes
Program Monitoring and Operational Support Division
Child Nutrition Programs

Page updated: November 24, 2021

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.