|DATE:||October 18, 2023|
|MEMO CODE:||SEBT 01-2024, FM 01-2024|
|SUBJECT:||Summer EBT Administrative Funding Process for FY2024|
Grants Management and Administrative Services
Supplemental Nutrition & Safety Programs
|State Agency and ITO Directors|
Child Nutrition Programs
All States and Territories
Indian Tribal Organizations
WIC State Agencies
The Consolidated Appropriations Act, 2023 (PL 117-328) (the Act) authorized a permanent, nationwide Summer Electronic Benefit Transfer (Summer EBT) Program beginning in 2024. The Act requires FNS to promulgate interim regulations within a year of the Act’s enactment. FNS is aware that states, including U.S. Territories, and covered Indian Tribal Organizations (ITOs) are already beginning to plan for Summer EBT and need certain information before the rule is published. This memorandum expands upon the information on the Summer EBT administrative funding process provided in SEBT 01-2023, Initial Guidance for State Implementation of Summer EBT in 2024, June 7, 2023, and SEBT 02-2023, Initial Guidance for Implementation of Summer EBT in 2024 by Indian Tribal Organizations Administering WIC, June 13, 2023. It also provides specific information on the process by which administrative funding will be provided to operate the program in fiscal year (FY) 2024. For FY 2025 and beyond, this memo will be superseded by Summer EBT program regulations and subsequent guidance.
For the purposes of this guidance, any state agency or ITO that administers the Summer EBT program is defined as a Summer EBT agency. The term ‘Summer EBT agency’ refers to agencies cooperating on administration of the state or ITO’s program as a whole unless the coordinating or partnering Summer EBT agency is specified. These terms are used to distinguish between the agency responsible for the overall administration of the program (i.e. the Summer EBT coordinating agency) and other state agencies involved in program operations (i.e. the partnering Summer EBT agency).
Requirements for Administrative Funding Requests (i.e. POMs)
The statute requires each state or ITO that will operate the Summer EBT Program to submit to USDA for approval a management and administration plan by February 15 of each year. For the purposes of Summer EBT, this will be referred to as a Plan for Operations and Management (POM). USDA approval of the POM is prerequisite for a Summer EBT agency to draw federal funds to cover USDA’s 50 percent of administrative costs. Although a final POM is not due until February 15, an interim POM is due as soon as is practicable for FY 2024, and annually thereafter by August 15. Approval of an interim POM allows Summer EBT agencies to access federal administrative funds in advance of completing the full planning process. The interim POM must include the Summer EBT agency’s forecasted program participation, anticipated administrative funding needs as expressed on the FNS-366A, Expenditure Plan (i.e., Budget Projection Statement), and other programmatic information required in the final POM to the extent that such information has been determined at the time of submission. Additional information on the requirements for final POM submissions will be provided through separate guidance and in program regulations as promulgated in the forthcoming Interim Final Rule. The information included in the interim POM should be the Summer EBT agency’s best estimates and will be subject to revision as more information becomes available.
The final POM submitted by each state and ITO operating the Summer EBT Program must include a budget which reflects:
- the comprehensive needs of the state or ITO’s Summer EBT Program, to include coordinating and partnering Summer EBT agency costs and any local agency costs, as applicable;
- the Summer EBT agencies’ plan to comply with any standards prescribed by the Secretary for the use of these funds;
- how program funds will be used to the maximum extent practicable to reach eligible children; and
- the total amount of administrative funding being requested and should denote amounts per Summer EBT agency.
A final POM may be submitted in lieu of an interim POM at the discretion of the Summer EBT agency.
Both the interim and final POM must be accompanied by an FNS-366A, Expenditure Plan, reflecting planned administrative cost needs for the year. The FNS-366A submitted with the interim and/or final POM constitutes each Summer EBT agency’s request for funds for planned administrative expenditures and may be subsequently revised. The FNS-366A will be submitted electronically in the Food Programs Reporting System (FPRS) under the Summer EBT program. This form will collect only Summer EBT administrative cost estimates and will be submitted separately from the FNS-366A under the SNAP program. Please see the instructions under Attachment A, developed to direct Summer EBT agencies in the completion of the FNS-366A and to provide guidance on how to estimate Summer EBT administrative costs. Please see Attachment B for additional information on Summer EBT report submissions.
A final approved POM will establish the Summer EBT agency’s available administrative funding level for the fiscal year. However, Summer EBT agencies will have the opportunity to revise their FNS-366A throughout the operational year and increases for well-documented costs will be considered, subject to available funds. As noted below and in prior guidance, all administrative funds for Summer EBT are subject to a 50 percent matching requirement.
As noted in memorandum SEBT 01-2023, for states administering Summer EBT through more than one agency, the agencies may submit separate administrative funding requests (i.e., an FNS-366A, Expenditure Plan) for the administrative convenience of receiving funds without the need to transfer money between Summer EBT agencies. However, the agencies must coordinate to ensure that costs are properly allocated between the agencies.
NOTE: While administrative funds may be received prior to approval of a final POM, a Summer EBT agency may not draw down federal food benefit funds until the final POM is approved.
FY 2024 Summer EBT Administrative Funding
Initial FY 2024 Administrative Funding Allocations
While the above section describes the general requirements for requesting administrative funding, FNS recognizes that Summer EBT agencies may need an initial increment of funding in FY 2024 to address immediate expenses while they develop and submit their interim and final POM, and accompanying FNS-366A, Expenditure Plan. Therefore, FNS will release an initial allocation of Summer EBT administrative funds to all Summer EBT agencies upon receipt of (1) a notice of intent to administer the program in 2024 and (2) an affirmative statement indicating that funding has been identified and is available to the Summer EBT agency to meet the required 50 percent match. The FNS-366A is not required to draw funds against the initial allocation described in this section; however, Summer EBT agencies, including partnering agencies, may only draw 50 percent funding for expenses that have already been incurred.
The notice of intent must be provided no later than Jan. 1, 2024 (see memoranda SEBT 01-2023 and SEBT 02-2023). A template notice and sample language for the affirmative statement will be provided through your regional office. The affirmative statement may be included as an attachment or sent subsequent to the notice of intent; however initial FY 2024 administrative funds will not be released until both have been provided. The affirmative statement must clearly attest that matching funds are available for each Summer EBT agency that will receive administrative funds.
The amount of the initial allocation will be based on expenditure and unliquidated obligation data reported to FNS on the SNAP PEBT Administration Grant (PAN-SNAP-PEBT-Admin) or the CN PEBT Administration Grant (PAN-CN-PEBT-Admin) reports, as appropriate in FYs 2021 and 2022. If no such data are available, then the initial amount made available will be $100,000.
Initial FY 2024 funds will be a provided in amount equaling up to 16.25 percent of the average total expenditures for both grant years; or $100,000, whichever is greater.
FY 2021 Total Federal Share of Expenditures and Unliquidated Obligations
or $100,000, whichever is greater.
FNS regional offices will inform each state agency and ITO of the initial funding amount available to them once letters of intent and affirmative statements are received. Initial funding will be made available through FNS-529 grant awards, which will be modified once full budget proposals are approved.
Additional FY 2024 Funding
As stated in the Requirements for Administrative Funding Requests section above, an FNS-366A, Expenditure Plan, must be reviewed and approved by the FNS regional office as part of the interim and final POM. The FNS-366A submission should include the initial funding allocation described in the previous section (as applicable), as well as any additional funding needed beyond the initial allocation. Further revisions to the FNS-366A may be submitted throughout the year, as needed, to reflect the final administrative funding level for FY 2024. Additional requests and revisions are subject to the availability of funds.
FY 2024 Grant Agreements
Any Summer EBT agency that receives FY 2024 administrative funding as a direct grant must sign an FNS-529, Grant Award Agreement, with their respective FNS regional office. The FNS-529 with accompanying terms and conditions will be provided to Summer EBT agencies by their respective FNS regional offices at the time that initial awards are made. The FNS-529 will require modification to reflect final funding amounts. The Assistance Listing Number for Summer EBT administrative funds is 10.646 Summer Electronic Benefit Transfer Program for Children and will be included on the FNS-529.
FNS may alter this approach in FY 2025 by utilizing a federal-state agreement in lieu of the FNS-529.
FY 2024 Period of Performance
The period of performance for FY 2024 Summer EBT administrative funding grants will be Oct. 1, 2023, to Sept. 30, 2024. Accordingly, any expenses incurred within this time period may be applied to the FY 2024 grant.
FY 2025 Summer EBT Implementation Costs
States and ITOs intending to begin operating Summer EBT in FY 2025 may receive administrative funding in FY 2024 to cover planning and implementation costs related to FY 2025 Summer EBT operations. These Summer EBT agencies may receive their total FY 2024 Summer EBT administrative funding once their FNS-366A, Expenditure Plan, has been reviewed and approved by the FNS regional office as part of their FY 2025 interim POM, along with an affirmation statement indicating that funding has been identified and is available to the Summer EBT agency to meet the required 50 percent match. (Note: the FNS-366A should reflect anticipated expenses for FY 2024 only.) A new FY 2025 interim POM and FNS-366A will need to be submitted by Aug. 15, 2024, to receive administrative funding for FY 2025, and an FY 2025 final POM will need to be approved in order to receive benefit funds for FY 2025.
Method of Payment, Reporting, Recovery of Funds, and Records Management
Administrative funds will be provided for each Summer EBT agency’s grant through a letter of credit (LOC). The LOC is the mechanism by which a Summer EBT agency can draw authorized funds from the United States Treasury. The draw of 50 percent funding from the LOC may occur once allowable expenses have been incurred. Summer EBT agencies must draw funds in accordance with their annual Cash Management Improvement Act Agreements and, to the greatest extent possible, should minimize the time lapse between drawing and expending funds.
Summer EBT agencies will report their incurred administrative expenses on an FNS-778, Financial Status Report, on a quarterly basis. Like the FNS-366A form, the FNS-778, Financial Status Report, will be submitted electronically in the Food Programs Reporting System under the Summer EBT program. This form will collect only Summer EBT administrative expenses and will be separate from the FNS-778 submitted in connection with the SNAP program. Please see Attachment B for additional information on Summer EBT report submissions.
During the annual closeout for the grants, FNS will recover any administrative funds which are in excess of obligations reported at the end of each fiscal year through an adjustment in the Summer EBT agency's LOC.
Each Summer EBT agency must maintain program records to support administrative costs and retain these records for a period of 3 years, or as otherwise specified in the governing funding terms and conditions. Additionally, these records will be subject to periodic Financial Management Reviews. For general federal recordkeeping requirements, see 2 CFR 200.334, Retention Requirements for Records.
FNS is authorized to pay each Summer EBT agency an amount equal to 50 percent of the administrative expenses incurred in operating the program up to their approved FNS-366A level. This means that Summer EBT agencies may only draw 50 percent of expenses incurred from their LOC. Each Summer EBT agency in direct receipt of a Summer EBT administrative grant will be responsible for providing the required 50 percent match. The Summer EBT agency match may consist of project costs paid for with state or ITO funds or with cash contributed or donated to the agency by other non-federal public agencies and institutions. Consistent with 2 CFR 200.306, Cost Sharing or Matching, cash or in-kind contributions are generally allowable if they are verifiable, allowable, necessary, in the Summer EBT agency’s approved budget, and not related to any other federal program costs unless specifically provided in regulations. However, the value of services rendered by volunteers, or the value of goods contributed by third parties, exclusive of the state, ITO, and federal agencies, are not allowable cash or in-kind contributions in the Summer EBT Program.
As a general rule, federal funding may not be used to meet the match for another federal program. However, on rare occasions, certain federal funds are legislatively permitted to be used in this way. If a Summer EBT agency believes it has a federal funding source that is allowable as a match, they should reach out to their respective FNS regional office for further discussion. While FNS seeks to work with Summer EBT agencies to maximize the appropriate use of non-federal contributions, appropriation of state or ITO funding is expected to be the primary source of the match.
Allowable Administrative Costs
Allowable administrative costs for Summer EBT administrative funds are to operate the Summer EBT at the state, ITO, and local levels. To be allowable as an administrative cost in Summer EBT, expenditures must be valid obligations of a Summer EBT agency or a local agency operating under a formal agreement with a Summer EBT agency, inclusive of but not limited to contracts and subgrants. Additionally, costs must be necessary, reasonable, and allocable charges under an approved Summer EBT POM. Allowable costs are specified in the Office of Management and Budget’s (OMB) Uniform Guidance (i.e., 2 CFR 200) and FNS regulations as promulgated in the forthcoming Interim Final Rule. The following conditions apply to allowable costs for Summer EBT products or services. Allowable costs must:
- Directly relate to an approved Summer EBT component or service, i.e., allocable;
- Be necessary and reasonable;
- Not be for products or services that are outside the scope of the Summer EBT Program; and
- Not be a general expense required to carry out the overall responsibilities of a state, ITO, or local entity.
Examples of allowable Summer EBT administrative expenses may include, but are not limited to:
- Salaries and benefits of personnel involved in Summer EBT and administrative support;
- Office equipment, supplies, postage, and copying/printing costs;
- Indirect costs;
- Outreach associated with enrollment or the delivery of Summer EBT; and
- EBT-related or other system costs.
Considerations for Local Agency Administrative Costs
The expenses incurred by local education agencies (LEA) and other local agencies carrying out Summer EBT operational activities under formal agreements with Summer EBT agencies are allowable costs under Summer EBT administrative funding grants. However, in no cases may non-profit school food service account funding be used to meet the Summer EBT match.
The statute requires states and ITOs to make an application available for eligible children to apply who are not certified through streamlined certification. USDA recognizes that Summer EBT agencies may not have the systems and processes needed to process Summer EBT applications in time for 2024 operations. In 2024 only, Summer EBT agencies may delegate application processing to LEAs. However, if a Summer EBT agency delegates application processing to LEAs, then it should cover new administrative costs incurred by the LEAs with respect to Summer EBT application processing. To be fully reimbursed by the Summer EBT state agency, the administrative costs incurred by the LEA must be new activities related to processing Summer EBT applications. For LEAs that plan to use alternative income forms to certify children for Summer EBT in 2024, many of these forms have already been accepted and processed by LEAs. Summer EBT agencies are only required to reimburse for expenses directly related to the activities and processes required to implement the Summer EBT program.
Cost Allocation Requirements
Summer EBT is distinct from other FNS programs, therefore, Summer EBT agencies may not use federal funds intended for other FNS programs (e.g., SNAP, WIC, National School Lunch Program/School Breakfast Program, etc.) for Summer EBT expenses. If a Summer EBT agency conducts activities that will benefit the administration of more than one federal program, the agency must appropriately allocate administrative costs to each affected program. As a reminder, Child Nutrition State administrative expense funds may not be used to support Summer EBT costs in FY 2024 and beyond.
Each Summer EBT agency in receipt of a Summer EBT grant must determine a reasonable basis for allocating costs among agencies and should transfer funding for the allocated cost using the appropriate state or ITO procedures for interagency charges. In general, if a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on a reasonable, documented basis. For further information on cost allocation principles, please reference 2 CFR 200.405, Allocable Costs.
For any additional information needed on the contents of this memorandum, please contact your FNS regional office.
Child Nutrition Programs
Deputy Administrator/Chief Financial Officer
Office of Financial Management
|Diane M. Kriviski|
Supplemental Nutrition and Safety Programs
Supplemental Nutrition Assistance Program