[Federal Register Volume 83, Number 146 (Monday, July 30, 2018)]
[Notices]
[Pages 36516-36518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16196]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


Request for Information: State Administrative Expense Allocation 
Formula for Child Nutrition Programs

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Notice; request for information.

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SUMMARY: This is a request for information from State agencies 
administering Child Nutrition programs and State distributing agencies 
to learn about the successes, challenges, and needs for the State 
Administrative Expense (hereafter referred to as ``SAE'') allocation 
formula. It is not a request for proposal and does not commit the 
Government to issue a solicitation, make an award, or pay any costs 
associated with responding to this announcement. All submitted 
information shall remain with the Government and will not be returned. 
All responses will become part of the public record and will not be 
held confidential.
    The Food and Nutrition Service (FNS) is seeking information on the 
SAE allocation formula for the Department's oversight and management of 
Child Nutrition Programs (CNP), specifically the National School Lunch 
Program (NSLP), School Breakfast Program (SBP), Child and Adult Care 
Food Program (CACFP), Special Milk Program (SMP) and the Food 
Distribution Program for schools (FDP). To better understand the 
availability and use of SAE funds, FNS is requesting information from 
CNP State administering agencies, State distributing agencies, and CNP 
affiliate associations about SAE allocation, reallocation, fund uses, 
and fund restrictions at the State level.
    The objectives of this request for information are to:

[[Page 36517]]

    1. Identify ways that the formula meets or fails to meet State 
spending needs.
    2. Identify if additional flexibilities in SAE funding levels and 
rules could improve program administration.
    FNS will use the comments in response to this Request for 
Information to inform a larger study on the SAE formula entitled, 
Assessing the Child Nutrition State Administrative Expense (SAE) 
Allocation Formula. This study will assess the effectiveness of the 
current formula used for SAE allocations, identify and examine factors 
that influence State spending, and develop and test a range of possible 
alternatives to improve the SAE allocation formula.

DATES:  (if applicable): To be assured of consideration, written 
comments must be submitted or postmarked on or before September 28, 
2018.

ADDRESSES: The Food and Nutrition Service, USDA, invites the submission 
of the requested information through one of the following methods:
     Preferred method: Submit information through the Federal 
eRulemaking Portal at http://www.regulations.gov. Follow the online 
instructions for submissions.
     Mail: Submissions should be addressed to Jinee Burdg, 
Social Science Policy Analyst, Office of Policy Support, FNS, U.S. 
Department of Agriculture, 3101 Park Center Drive, Room 1014, 
Alexandria, VA 22302. Comments may also be emailed to 
[email protected].
    All information properly and timely submitted, using one of the 
three methods described above, in response to this request for 
information will be included in the record and will be made available 
to the public on the internet at http://www.regulations.gov. Please be 
advised that the substance of the information provided and the identity 
of the individuals or entities submitting it will be subject to public 
disclosure.
    All written comments will be open for public inspection at the FNS 
office located at 3101 Park Center Drive, Alexandria, Virginia 22302, 
Room 1014, during regular business hours (8:30 a.m. to 5:00 p.m., 
Monday through Friday). All responses to this notice will be summarized 
and included in the request for Office of Management and Budget (OMB) 
approval. All comments will be a matter of public record.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of this request for information should be directed to Jinee 
Burdg at [email protected].

SUPPLEMENTARY INFORMATION: CNPs are operated by a wide variety of local 
public and private providers that enter into agreements with State 
agencies, which are responsible for oversight and administration, 
including monitoring program operations and distributing federal cash 
reimbursements and USDA Foods. The number of agreements the State has 
with local CNP entities contributes significantly to the level of 
effort needed in State administration. Local organizations that have 
agreements with the State to operate NSLP, SBP, and SMP are referred to 
as school food authorities (SFAs). SFAs are public and private 
nonprofit local educational agencies (including charter schools) that 
operate the programs in schools under their jurisdiction, as well as 
residential child care institutions. The number of SFAs across States 
varies widely, often depending on the educational structure of local 
educational agencies in the State (i.e., county-based programs vs. 
single-site SFAs).
    Under the FDP for schools, USDA accepts food orders from States and 
then purchases food for States to provide to SFAs for use in their meal 
service (USDA Foods). States are responsible for the ordering, storage 
and distribution of the USDA Foods to the local ``recipient agencies'' 
(i.e., SFAs).
    In CACFP, States enter into agreements with ``institutions,'' which 
include independent (i.e., single-site) child care centers, adult care 
centers, and sponsoring organizations of family day care homes and/or 
centers. Similar to the NSLP, SBP, and SMP, the number of CACFP 
institutions across States varies widely, based on a variety of factors 
such as the popularity of family day care homes vs. centers and the 
number of afterschool care programs. The adult care component of CACFP 
is very small, with the majority of meals served in a small number of 
States.
    The State agencies that administer these CNPs include Education, 
Health, Human/Social Services, and Agriculture departments. In total, 
there are 85 State agencies in 54 States and territories that 
administer the programs and receive SAE from FNS. In 31 States, there 
is one agency (either Education or Agriculture) administering School 
Programs, FDP, and CACFP; 16 States have two agencies; and the 
remaining 7 States have three agencies.
    In fiscal year 2017, State agencies received over $282 million in 
federal grants to administer certain CNPs. The amount of funding 
allocated to each State agency is based on the SAE allocation formula, 
which was last revised in the 1990s. FNS is interested in learning in 
what ways the formula meets or fails to meet State spending needs; some 
State Agencies return excess funds year after year whereas other States 
request additional funds year after year. The Assessing the Child 
Nutrition State Administrative Expense (SAE) Allocation Formula study 
will evaluate the effectiveness of the current formula used for SAE 
allocations, examine factors that influence State spending, and develop 
and test a range of possible alternatives for the SAE allocation 
formula and for reallocation.
    The current SAE allocation formula consists of nondiscretionary 
funds (i.e., those funds required to be allocated as prescribed by 
statute) and discretionary funds (i.e., funds remaining after the 
nondiscretionary allocations are made). The first step in the 
allocation process is to determine the total amount of SAE funds 
available for allocation to State agencies. This amount, prescribed in 
Section 7(a)(1) of the Child Nutrition Act, is an amount equal to not 
less than 1\1/2\ percent of program expenditures for the second 
preceding fiscal year for the NSLP, SBP, SMP, and CACFP. Once the 
amount of funds available is determined, the nondiscretionary funds are 
allocated among state agencies based on a formula using the percentage 
of the second preceding fiscal year's program expenditures, in 
accordance with 7 CFR 235.4(a). Discretionary funds are partially 
distributed in equal shares to states that administer specific programs 
and partially prorated based on number of program participants per 
state under 7 CFR 235.4(b). Residual funds are prorated among state 
agencies administering CACFP and FDP. In addition, FNS uses funds 
returned to it to provide funds to SAs through reallocations (7 CFR 
235.5(d)) and to provide for start-up costs to SAs assuming 
administration of program currently administered by FNS.
    FNS requests that CNP State administering agencies, State 
distributing agencies, CNP affiliate associations, and other interested 
parties respond in detail to any or all of the items below. Please 
provide any material that addresses the information requested or any 
other information that may be pertinent. FNS will consider comments 
that may require regulatory or statutory changes. Additional references 
or links to materials are welcome.
    1. What challenges, if any, does your State have with SAE? Please 
discuss processes, timing, Federally-imposed requirements/restrictions, 
State-imposed requirements/restrictions, the Maintenance of Effort 
requirement or other requirements, issues around

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reallocation, changes in the indirect cost rate, and other challenges/
barriers. If your State has successfully overcome these challenges, can 
you please share any best practices that may be helpful for other 
States?
    2. What aspects of SAE work well for your State? Please identify 
the aspect that works well and why it works well for your particular 
State.
    3. Does the current SAE funding methodology and regulations provide 
you with levels of funding and flexibility commensurate with your 
program administration needs (including NSLP/SBP, CACFP, and FDP)?
    4. Please identify whether your State transfers funds among State 
agencies, receives reallocations, or neither. Please discuss why your 
funding levels are or are not appropriate.
    5. What funding level (e.g., percentage increase or decrease) or 
basis for funding level would be appropriate?
    6. Please discuss how the availability of other program-specific 
funds such as the Summer Food Service Program State Administrative Fund 
and CACFP Audit Funds affect your State's ability to support the 
overall administration of CNPs.
    7. Please provide any other comments applicable to the SAE 
requirements and processes.\1\
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    \1\ See 42 U.S.C. 1776. https://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap13A-sec1776.pdf

    Dated: July 23, 2018.
Brandon Lipps,
Administrator, Food and Nutrition Service.
[FR Doc. 2018-16196 Filed 7-27-18; 8:45 am]
 BILLING CODE 3410-30-P