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FY 2023 Reallocation of State Administrative Expense Funds in Child Nutrition Programs

FNS Document #
SP04-2023, CACFP04-2023
Resource type
Policy Memos
Resource Materials
PDF Icon Policy memo (168.53 KB)
DATE:Feb. 17, 2023
POLICY MEMO:SP 04-2023, CACFP 04-2023
SUBJECT:Fiscal Year (FY) 2023 Reallocation of State Administrative Expense (SAE) Funds in Child Nutrition Programs
TO:Regional Directors Special Nutrition Programs All RegionsState Directors
Child Nutrition Programs
All States
State Directors
Food Distribution Programs

This memorandum provides the information needed to conduct the FY 2023 reallocation of SAE funds in the child nutrition programs (CNPs). Reallocation is a formal process by which state agencies can request additional SAE funds above their initial authorized funding level. Please be reminded that a number of updates to the carryover and reallocation of SAE funding went into effect in FY 2020. For additional information, refer to policy memo SP-09-2020, CACFP-04-2020, Updated Instructions for the Recovery and Reallocation of State Administrative Expense (SAE) Funds in Child Nutrition Programs.

FNS-525 and Reallocation Request

State agencies must use the SAE Funds Reallocation Report (FNS-525) to request SAE reallocation funding. All state agencies must submit an FNS-525 to their respective USDA Food and Nutrition Service (FNS) regional office, even if the state agency is not requesting funds.

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. In FY 2023, FNS expects the amount available for reallocation to be lower than in previous years. As such, FNS encourages states to prioritize funding requests that would support the administration of and efficiency improvements in food distribution programs for the National School Lunch Program, as well as those that enhance the integrity of the child nutrition programs.

FNS requests that no later than March 20, 2023, state agencies submit FNS-525s and requests for SAE reallocation funds to their respective FNS regional office.


State agencies must ensure that the total amount of SAE funds (initial allocation plus reallocation and transfers for states receiving, or minus transfers in the case of those transferring out) carried over into FY 2024 does not exceed an amount equivalent to 20% of the total amount of all SAE allocations received in FY 2023.

State SAE Plans

The state’s SAE plan must reflect an estimate of the planned use of SAE funds through the end of FY 2023. An amendment to the SAE plan must be made and approved by the regional office for any substantive changes in planned activities or planned expenditures on activities as a result of receiving SAE reallocation funds. If SAE reallocation funds are used for Summer Food Service Program purposes, the associated management and administration plan (MAP) may also need to be amended accordingly [7 CFR 225.4].

SAE Recovery

FNS will recover SAE funds from any state agency that fails to expend the approved amount of the SAE funds by the end of the grant period.

Below is a table of key dates associated with the reallocation process:

March 20, 2023State agencies submit SAE reallocation requests and FNS-525s to regional offices.
April 28, 2023FNS notifies SA of SAE reallocation results.
Sept. 30, 2023End of first year of FY 2023 SAE funds grant period. State agencies are allowed to carry over an unobligated amount no greater than 20% of the total FY 2023 SAE funds allocation into FY 2024 (initial allocation plus reallocation and plus or minus transfers).
Sept. 30, 2023End of FY 2023 SAE reallocation funds grant period. All SAE reallocation funds awarded in FY 2023 must be obligated and expended.

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

Jessica Saracino
Program Monitoring and Operational Support Division
Child Nutrition Programs

Page updated: February 07, 2024