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Administration: PL 106-554

DATE:January 19, 2001
SUBJECT:Implementation of the Summer Food Service Program Pilot Projects Authorized by the Consolidated Appropriations Act, 2001
TO:Regional Directors
Child Nutrition Programs
All Regions

State Directors
Summer Food Service Program
All States

The Consolidated Appropriations Act, 2001 (PL 106-554), which was signed into law on Dec. 21, 2000, authorizes SFSP pilot projects to increase the number of children participating in the program in states with low participation rates. The new authority for these pilot projects is in section 18(f) of the Richard B. Russell National School Lunch Act (NSLA) (42 USC 1769(f)). The pilot projects will operate from fiscal year (FY) 2001 through FY 2003 and enable public and certain other sponsors in the eligible states to eliminate the operating and administrative cost comparisons required by sections 13(b)(1)(A) and (b)(3) of the NSLA and the SFSP regulations at 7 CFR 225.9(d)(7) and (d)(8). This provision applies to government sponsors, public and private nonprofit school food authority sponsors, public and private nonprofit National Youth Sports Program sponsors, and public and private nonprofit residential camp sponsors. The law specifically excludes all other private nonprofit organizations from the pilot projects.

State eligibility for participation in these pilot projects is based on a formula described in section 18(f)(1) of the NSLA. Based on this formula, 14 states qualify for participation in the pilot projects. These states are (by region):

NERO - New Hampshire
MARO - Puerto Rico
SERO - Kentucky
MWRO - Indiana
SWRO - Arkansas, Oklahoma, Texas
MPRO - Iowa, Kansas, Nebraska, North Dakota, Wyoming
WRO - Alaska, Idaho

We must emphasize that sponsors participating in these pilot projects must continue to maintain a nonprofit food service for children, as required by section 13(a)(1) of the NSLA. Benefits to children and the quality of program administration must not be diminished by this reduced burden for sponsors. Even though they will receive administrative and operating reimbursement payments without comparison to actual costs and their administrative budgets, they may only use operating and administrative funds to pay for allowable costs, as defined in the SFSP regulations at 7 CFR 225.2 and applicable FNS instructions. In addition, sponsors must maintain records of expenditures. Finally, state agencies should remind sponsors that they must continue to submit an administrative budget with their annual application to participate in the SFSP. state agencies should review the budgets to ensure that sponsors are capable of properly administering the program.

The authority for these pilot projects is effective beginning Oct. 1, 2000. Therefore, any sponsors that qualify for participation in these pilot projects may amend any claims that have been submitted for the FY 2001 period to request the maximum reimbursement amount they are entitled to receive under this provision.

We want to encourage state agencies to review their SFSP payment systems to determine if a system or procedural modification will be needed to allow program payments to be made without a comparison to costs for eligible sponsors.

Section 13(f)(5) of the NSLA requires FNS to conduct an evaluation at the conclusion of these pilot projects. We will provide you with information on the data needed to conduct this evaluation at a later date. In the meantime, please keep us informed of any problems or issues that arise with the implementation of these pilot projects.

Child Nutrition Division

Page updated: January 24, 2024