School Food Best Practices Funds

Overview

On June 30, 2022, Governor Gavin Newsom signed AB 181 (Statutes of 2022) into law. This law appropriated $100 million from the State of California’s General Fund to the California Department of Education (CDE) to distribute to LEAs to expend on implementing any of the following best practices for school meals:

• Procuring California-grown or produced, sustainably grown, whole or minimally processed foods,
• Using California-grown, whole or minimally processed foods in plant-based or restricted diet meals for pupils,
• Procuring plant-based or restricted diet meals, or
• Freshly preparing meals on site.

Funds will be allocated to eligible LEAs, defined in statute as school districts, county offices of education, and charter schools that sponsor the USDA NSLP or SBP. Funding amounts are determined by the number of LEAs registering for funds and calculations as directed in statute.

These funds must be encumbered by June 30, 2025, and must be used for expenses incurred on or after the date the LEA received notification from the CDE of the amount to be distributed to the local educational agency. Funding is noncompetitive and eligible entities must register their interest using an online registration form. LEAs receiving funds must complete a mandatory report by June 30, 2025.

Eligibility

AB 181 defines LEAs eligible for SFBP funds as school districts, county offices of education, and charter schools. Additionally, only these LEAs that are also program sponsors of the NSLP or SBP are eligible for this funding.

In order to be eligible for funding, an LEA must be in good standing and, at the time the online opt-in registration form is due, have a(n):

• Current County District Code, Charter Number, Vendor or Service Number;
• Approved Child Nutrition Program Permanent Single Agreement with the California Department of Education (CDE), Nutrition Services Division;
• Valid Child Nutrition Information and Payment System (CNIPS) identification number on file; and
• Fully-approved School Nutrition Program (SNP) Sponsor Application in CNIPS for School Year 2022–23

More information on good standing status is found on the CDE’s Good Standing Status for SNPs webpage.

Participation is voluntary and funding is noncompetitive. To receive these funds, eligible LEAs must submit a complete online registration form by the stated deadline and attest that the information they have provided is true and that they will fulfill the requirements for use of these funds. An LEA that receives SFBP funds must certify that it will use the funds for the costs incurred by the LEA on implementation of any of the school food best practices defined in AB 181 as part of serving reimbursable meals through the NSLP or SBP on or after the date the CDE notifies the LEA of their award. The LEA must also attest that it will maintain documentation to substantiate use of funds and that it will fulfill the required reporting. These certifications and attestations are a condition of the award.

Guidelines

Timeline
Registration Form
Expenditures Overview
Procurement
Record Keeping
Reporting

Timeline

SFBP Registration Form

Eligible LEAs must submit a complete SFBP Registration Form by the posted deadline in order to receive an award. Awards will be calculated as directed by AB 181 for all eligible sites served by the LEA. LEAs should consider the needs of all sites served when determining how funds will be spent as well as how these funds can support implementation of California’s Universal Meals Program.

The opt-in registration form must be submitted by an authorized representative of the agency as identified by the LEA in the Child Nutrition Information and Payment System.

Following submission of the opt-in registration form, applicants will receive a confirmation email from the California Department of Education (CDE). Maintain this confirmation email for your records. If you do not receive a confirmation email within 48 hours of submission, please email [email protected] to inquire about your registration. Failure to notify [email protected] within the specified time frame may result in lack of funding for your agency.

Expenditures Overview

The SFBP funds are intended to supplement federal and state meal reimbursement. LEAs may not use these funds for costs incurred prior to date that CDE posts the SFBP awards. Once award amounts are posted, LEAs may spend the SFBP funding on implementation of any of the following school food best practices as stated in the legislation as part of serving reimbursable meals through the NSLP or SBP:

• Procuring California-grown or produced, sustainably grown, whole or minimally processed foods to support equity in the procurement practices of local agencies;
• Using California-grown, whole or minimally processed foods in plant-based or restricted diet meals for pupils;
• Procuring plant-based or restricted diet meals for pupils in the procurement practices of LEAs, or
• Freshly preparing meals on site.

As required by the legislation, the CDE and California Department of Food and Agriculture have developed eligibility criteria for expenditures under each of these categories. Refer to the Allowable and Unallowable tab for more information. If you have questions or feedback regarding the criteria please contact the [email protected] with your input by March 30, 2023.

Procurement

These funds are state General Fund monies. At a minimum, your LEA must follow all applicable procurement processes and guidelines which may include, but are not limited to:

• Conducting procurements in a manner that is compliant with your agency’s procurement procedures and that promotes full and open competition
• Complying with your agency’s written standard (or code) of conduct that covers conflicts of interest, including organizational conflicts of interest, and that governs the performance of employees engaged in the selection, award, and administration of contracts and purchases
• Maintaining records sufficient to detail the history of the procurement. These records will include, but are not limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price
• Maintaining all vendor invoices, and receipts

LEAs who received more than $1,000,000 in annual federal meal reimbursement must follow the procurement requirements under Senate Bill (SB) 490—The Buy American Food Act: public institutions: purchase of nondomestic agricultural food products for all procurement contracts executed after January 1, 2024.

Effective immediately, all LEAs must follow the procurement requirements under AB 778—Institutional purchasers: purchase of California-grown agricultural food products. For more information visit the CDE SB 490 and AB 778 web page.

Record Keeping

As a condition of receiving SFBP funds, LEAs are required to maintain sufficient documentation to substantiate that purchases and expenditures align with SFBP allowable uses of funds.

Documentation and reporting required by the federal School Nutrition Programs (SNP) may also provide sufficient documentation for the SFBP funds.

Examples of documentation based on a meal service model that can be used to demonstrate compliance with SFBP funding requirements include, but are not limited to:

• Self-preparation: menus, menu production records (meal preparation, menu and serving sizes, and nutrient analysis), policy and procedures for meal service (breakfast and lunch), meal counts, food invoices, time and effort documentation, or equivalent documentation
• Vended meals: menus, menu production records (meal preparation, menu and serving sizes, and nutrient analysis, health permits, ordering and service information, vending contract, invoices, procurement practices, or equivalent documentation
• Food Purchases: attestation or certification from the producer, farmer, or vendor that food or practices demonstrate the SFBP definitions and criteria for California-grown or produced, sustainably grown, whole or minimally processed foods.
• Equipment purchases: invoices, or proof of CDE approval, if applicable.

LEAs must maintain all SNP records for a period of three years after the end of the fiscal year to which they pertain, unless audit or investigative findings have not been resolved, in which case the records shall be retained until all issues raised by the audit or investigation have been resolved. [Title 7 Code of Federal Regulation (7 CFR) 210.23(c)
for NSLP and 7 CFR 220.7(e)(13) for SBP
]

LEAs are also responsible for retaining appropriate documentation demonstrating compliance with Senate Bill 490 and Assembly Bill 778.

Reporting

As a condition of accepting these funds, LEAs must commit to completing a mandatory funding summary report. This report will gather details on how the funds were used to increase California-grown or produced, sustainably grown, or whole or minimally processed foods in school meals, which could include plant-based and restricted diets, as well as ongoing plans for sustaining these procurement practices. The CDE anticipates that this report will be submitted in the form of an online survey. This survey will be available by May 2025, and will be due by June 30, 2025. Failure to complete the mandatory reporting requirements may result in a billing notice to recover the apportioned SFBP funds.

Funding

Funding Announcements
Funding Mechanism and Timelines
Funding Formulas
Tracking Funds
Accounting
Expenditure Deadline

Funding Announcements

The California Department of Education (CDE) will post an official notification or Apportionment Letter when funds have been distributed. The CDE will also send a Notice of Apportionment to the State Controller, State Treasurer, State Department of Finance, and County Superintendents of Schools to distribute the appropriate funds to the awarded LEAs.

Once posted, the list of recipients and funding allocations will be posted on the CDE Funding Results web page. After selecting the link, type “School Food Best Practices” in key words, then search. This will bring up the SFBP Funding Results. You can also access the SFBP Funding Results links from the CDE Rates, Eligibility Scales, and Funding web page, under the Grants section.

LEAs awarded may begin incurring allowable costs on the date the funding notice is posted continuing through the expenditure deadline.

Funding Mechanism and Timelines

The CDE will release 100 percent of each eligible LEA’s total award to their respective County Treasurer’s Office to distribute the funds.

SFBP Funds must be encumbered by June 30, 2025.

LEAs are not required to use the total funding received; however, unused funds must be returned to the CDE within 30 days of receiving a billing notice.

Funding Formulas

This funding must only be used on allowable expenditures for the implementation of school food best practices as part of serving reimbursable meals through the NSLP or SBP as described in the SFBP Apportionment Guidelines and Allowable Expenses tabs.

Total Amount of Funds Available to Distribute: $100,000,000

Award amounts are calculated according to three categories:

• Base Funding ($50,000): Each eligible LEA may request a noncompetitive, base funding level of $50,000.
• Meal-Service-Based Award: After the base funding is awarded, fifty percent of the remaining funds are allocated proportionately to LEAs based on the total number of eligible reimbursable meals served in October 2021 by the LEA. NSLP, SBP, and Seamless Summer Option meals are included in this calculation.
• Eligibility-Based Award: Remaining funds are allocated proportionately based on the LEA’s total enrollment of pupils eligible for free or reduced-priced meals at all eligible sites within the LEA’s sponsorship.

Note: The funding approaches provided in this section are formulaic; actual amounts awarded will be determined based on the eligible LEAs registered to receive funds. Actual award amounts will be posted on the CDE Funding Results web page.

This is a noncompetitive, voluntary funding opportunity. Eligible LEAs may choose to decline these funds altogether by not completing the registration form.

Tracking Funds

With the number of funding streams currently available to purchase local, whole, or minimally processed foods as well as to support the preparation of freshly prepared onsite meals, LEAs must ensure complete and accurate documentation of expenditures to avoid using two funding streams to pay for a single expense.

LEAs may begin to use the funds for allowable costs incurred on or after the date the funding notice is posted and continuing through the encumbrance deadline. However, the CDE recommends that LEAs refrain from obligating or expending funds until the funds have been received and deposited into the LEA’s account. In anticipation of receiving these funds, LEAs are encouraged to develop an internal plan and process to prepare for these expenditures.

LEA are encouraged to deposit the SFBP funds into the agency’s cafeteria fund account or Fund 13. The SFBP Funds should be accounted for and tracked separately using the new standardized account code structure (SACS) resource code provided in the Accounting Section below for the SFBP funds. SFBP funds must be used to procure food options and to support operations to prepare and serve freshly prepared onsite reimbursable meals for the NSLP and SBP, and, as such, are subject to the rules governing the cafeteria fund.

Once funds are deposited into the cafeteria fund, they take on the restrictions associated with this fund. Keep in mind that cafeteria fund expenditures not in compliance with federal regulations may be subject to disallowance.

For more information on restrictions and regulations governing the use of cafeteria funds, please see the CDE Cafeteria Fund Guidance web page.

Equipment purchases made with SFBP funds would only require CDE pre-approval if SFBP funds are:

If pre-approval is necessary please follow the normal procedures to request approval for equipment expenditures, by contacting the Resource Management Unit at [email protected].

Accounting

The CDE has created a new standardized account code structure (SACS) resource code to help you record the SFBP Funds. Use the resource code below when depositing SFBP funds into your agency’s general fund (Fund 01) or cafeteria fund (Fund 13). Use the revenue object code below to track the origination of the SFBP funds:

• SACS Resource Code: 7033
• Revenue Object Code: 8520

The SACS resource code is now available in the SACS tables of valid code combinations. If you have questions about the accounting for these funds using the new resource code, please contact the School Fiscal Services Division at [email protected].

Also note that indirect costs are not an allowable expense for the SFBP funds.

Expenditure Deadline

Funds must be encumbered by June 30, 2025. Unused funds must be returned to CDE within 30 days of receiving a billing notice.

Definitions and Expenses Criteria

Allowable Expenses:

Limited Allowability:

Unallowable Expenses

As required, the California Department of Education (CDE), in partnership with the California Department of Food and Agriculture, developed the definitions and expenditure criteria for California-grown, whole or minimally processed, sustainably grown food, and plant-based or restricted diet food options from California producers that can be purchased with SFBP funds.

If you have questions or feedback regarding the definitions or implementation of this criteria, please send them to [email protected] by March 30, 2023.

Allowable Expenses

LEAs may spend the SFBP funding on implementation of any of the following school food best practices as part of serving reimbursable meals through the NSLP or SBP:

• Procuring California-grown or produced, sustainably grown, whole or minimally processed foods to support equity,
• Using California-grown, whole or minimally processed foods in plant-based or restricted diet meals for pupils,
• Procuring plant-based or restricted diet meals for pupils, or
• Freshly preparing meals onsite.

As previously mentioned, with the numerous funding streams currently available to purchase local, whole, or minimally processed foods as well as to support the preparation of freshly prepared onsite meals, LEAs must ensure complete and accurate documentation of expenditures to ensure expenses are funded and tracked appropriately.

California-grown Food

“California-grown,” “California grown,” and similar terms with identical connotations include food or agricultural products that have been produced in the state or harvested in its surface or coastal waters.

“California-grown” food or agricultural products purchased with SFBP funds must also have been fully, 100 percent, processed in the state of California. Note that, for processed foods, only minimal processing is allowable under this funding.

Whole or Minimally Processed Foods

“Whole” foods are defined as a naturally occurring, unprocessed foods.

Foods that are “minimally processed” have undergone only those processes that include:

• Traditional processes used to make food edible or to preserve it or to make it safe for human consumption, for example, smoking, roasting, freezing, drying, and fermenting, or
• Physical processes that do not fundamentally alter the raw product or that only separate a whole, intact food into component parts, for example, grinding meat, separating eggs into albumen and yolk, and pressing fruits to produce juices.

“Whole” or “minimally processed” foods may come in a wide variety of states (e.g., whole, cut, sliced, diced, pureed, etc.) or forms (e.g., fresh, frozen, canned, dried, etc.) and still be considered minimally processed. Examples of minimally processed foods from each of the reimbursable meal components are:

• Fruits and vegetables (including 100 percent juice)
• Pastas, rice, oatmeal
• Meats (whole, pieces, or ground meat)
• Meat alternates such as tofu, beans, and legumes
• Cheese and yogurt

“Whole” or “minimally processed” foods purchased with SFBP funding excludes fluid dairy milk.

Sustainably Grown Foods

“Sustainably grown” foods are those that are grown or raised using Climate Smart Agriculture Practices, Climate Smart Agriculture Production Systems, or Other Regenerative Strategies.

• Climate smart agriculture practices include those defined by the USDA Natural Resources Conservation Service (NRCS) Conservation Practice Standards (CPS) and those identified by the CDFA Office of Environmental Farming and Innovation via the Healthy Soils Program (HSP)
  (PDF), Alternative Manure Management Program (AMMP)
  (PDF), Dairy Digester Research and Development Program (DDRDP)
  (PDF), and State Water Enhancement and Efficiency Program (SWEEP)
  (PDF), including but not limited to cover cropping, no or reduced till, hedgerow plantings, compost application, and prescribed grazing.
• Climate smart agriculture production systems include certified organic or transitioning to certified organic.
• Other regenerative strategies include those that also increase resilience to climate change, improve the health of communities and soil, protect water and air quality, increase biodiversity, and help store carbon in the soil.

“Sustainably grown” foods purchased with SFBP funding must also be purchased from California food producers that can attest or demonstrate and verify that they use one or more of the sustainably grown practices above to provide foods and agricultural products.

Supporting Equity

Per the legislation, procurement of California-grown or produced, sustainably grown, whole or minimally processed foods through SFBP funds is intended to support equity. To achieve this, LEAs may:

• Make purchases from farmers and producers that identify with historically disadvantaged groups or small business
• Establish equity in menu options by providing more culturally relevant options
• Expand incorporation of locally grown, sustainable, and whole or minimally processed food options in schools with high FRPM enrollment across the district.

Plant-based Food Options

“Plant-based food option” means a food that contains no animal products or byproducts, including meat, poultry, fish, dairy, or eggs, and that is recognized by the USDA as a meat alternate for purposes of the NSLP.

“Plant-based food options” purchased with SFBP funds may be purchased as either the meat or meat alternate alone, or may be purchased as a complete plant-based meal. When SFBP funds are used to purchase complete meals, the remaining meal components must be California grown and must combine together to form a reimbursable meal under the relevant USDA School Nutrition Program (SNP) guidance.

SFBP funds may be used for procuring plant-based or restricted diet meals for pupils from a vendor including another SNP operator. LEAs choosing to procure plant-based meals by vending meals need to ensure that the vendor can provide the required documentation for reporting.

Restricted Diet Food Options

“Restricted diet food option” means a food prepared in response to a pupil with at least one dietary restriction, including, but not limited to, religious dietary restrictions or restrictions prescribed by a physician.

Medically restricted diet food options shall be provided to a pupil as a part of a reimbursable meal that meets the USDA NSLP or SBP meal pattern requirements. Exceptions for meal pattern requirements due to a disability must be authorized by a State of CA licensed physician, physician’s assistant, or nurse practitioner, in writing and be on file at the school. See Management Bulletin 02-2017 for more information.

SFBP funds may be used to purchase food items to accommodate restricted diets based on religious or personal dietary restrictions. In these instances, the meals provided to make reasonable accommodations using the items purchased must meet the criteria for reimbursement under USDA’s SNP guidance.

SFBP funds may also be used for procuring restricted diet meals for pupils from a vendor including another SNP operator. LEAs choosing to procure restricted diet meals by vending need to ensure that the vendor can provide the required documentation for reporting.

While restricted diet food options purchased with SFBP funds are not required to be minimally processed or California grown or produced, it is encouraged whenever possible.

Freshly Preparing Meals Onsite

Allowable expenditures for “freshly preparing meals onsite” include staffing, equipment and supplies consistent with federal requirements. SFBP funding may be used to cover the cost of a Food Service Management Contract (FSMC) preparing freshly prepared meals onsite for the LEA.

“Freshly prepared onsite meal” means food service in which the preparation of meals takes place on a daily basis at the site of consumption or in a district’s central kitchen, using whole ingredients in their most basic, minimally processed form, or cooking with both fresh, raw, whole ingredients and ready-made products.

LEAs may only use SFBP funds for ingredients to comprise the freshly prepared meal onsite if they meet the SFBP definitions and criteria for allowable food options.

Staffing

Staffing related to implementing any of the school food best practices listed in the legislation is an allowable use of funds. SFBP funds for staffing may only be used for time and effort costs beginning on the date the funding notice is posted continuing through the expenditure deadline. LEAs must maintain time and effort documentation (e.g., duty statements, timecards) when using SFBP funds for staffing. Additionally, staff costs can be prorated across multiple funding sources; however, costs invoiced cannot be in excess of 100 percent of the total costs.

Contracting Services

An LEA may use SFBP funds to contract for the services described above. For funds deposited into the cafeteria account or Fund 13, LEAs must follow the federal procurement process outlined in 2 CFR 200. SFBP funds held outside the cafeteria account of Fund 13 must follow applicable federal, state, and local procurement requirements.

Equipment

SFBP funds may be used to purchase equipment in order to support procurement or to implement freshly prepared onsite meals. With the number of funding streams currently available to purchase equipment, LEAs must ensure complete and accurate documentation and avoid double dipping – using two funding streams to pay for a single expense. With proper documentation, equipment purchases can be funded across multiple funding streams up to 100 percent of their value.

LEAs must follow established capital expenditure requirements when purchasing equipment with SFBP to support the implementation of freshly prepared onsite meals. If the funds are deposited into the cafeteria fund or fund 13, LEAs must receive pre-approval from their analyst prior to encumbering an equipment cost, if applicable. Pre-approval is required for any equipment that is over $5,000 or not listed on the Capital Expenditure Approved List. Also, it should be noted that infrastructure costs are not an allowable expense.

Limited Allowability

The following two categories of purchases are only allowable when procuring plant-based or restricted diet food items or meals for pupils.

Processed Food Items

SFBP funds a number of school food approaches. When using these funds to freshly prepare meals on site, or to procure California-grown, whole or minimally processed foods, or when using California-grown, whole or minimally processed foods in plant-based or restricted diet meals for pupils, the purchase of processed food items is not allowable.

The CDE supports quality student nutrition and the use of minimally processed ingredients in all meals, including plant-based and restricted diet meals. LEAs using SFBP funds to procure plant-based and restricted diet meals and food options are encouraged to purchase minimally processed foods to ensure that students with dietary preferences or restrictions have the same great access to delicious, quality school meals.

Vended Meals

Vended meals do not meet the definition of a freshly prepared onsite meal and therefore SFBP funds cannot be used to support vended meal service, with the exception of procuring plant-based or restricted diet meals for pupils as noted previously.

Unallowable Expenses

Indirect Costs

Indirect costs consist of agency-wide business and administrative costs such as accounting, budgeting, personnel, purchasing, and centralized data processing and are not an allowable expense for the SFBP funds.

Infrastructure Costs

Infrastructure costs are not an allowable expense for the SFBP funds.