Module 1 Resource Management, Procurement, Administrative Review, and Professional Standards

Transcription

1 Califrnia Prfessinal Nutritin Educatin Training Schl Nutritin Prgram Online Training Mdule 1 Resurce Management, Prcurement, Administrative Review, and Prfessinal Standards Target Audience Schl fd authrity (SFA): Nutritin directr f schl districts and cunty ffices f educatin (COE) Staff respnsible fr the financial and administrative review (AR) cmpnents f the child nutritin prgram (CNP) Fr Residential child care institutin (RCCI): Executive directr Fd service directr (FSD) f RCCI Staff respnsible fr the financial and AR cmpnents f the CNP Estimated Time Required: 60 minutes Cntents 1. Resurce Management 2. Cafeteria Funds 3. Net Cash Resurces 4. Paid Lunch Equity 5. Nnprgram Fd Revenues 6. Indirect Cst Guidance 7. Prcurement 8. Administrative Review 9. Prfessinal Standards Learning Objectives Understand the requirements fr and the uses f the cafeteria fund in the Schl Nutritin Prgram (SNP) Identify net cash resurces and the ptins t spend dwn the excess r apply fr an exceptin t the limit Define and be able t calculate the weighted average price (WAP) f lunches and determine the paid lunch equity (PLE) Identify the prcurement standards fr CNPs and the ethical standards regarding vendrs Explain and be able t determine if the revenue frm nnprgram fd sales is equal t r greater than the ttal cst f the nnprgram fds Describe the difference between indirect and direct csts and hw a district may charge direct and indirect csts t the cafeteria fund Understand the rganizatin f the AR and the rle f the ff-site and n-site risk assessments Knw hw t apply the prfessinal standards rules n hiring and annual training SNP Online Training Page 1

2 1. Resurce Management f the Schl Meal Prgram The cafeteria fund (the mney brught int yur district thrugh the sale r reimbursement f schl meals, ther fd, r any ther surces f revenue), is strictly gverned by bth federal and state laws. It is a required and restricted accunt (separate frm general fund) that must be in place t track the revenue and expenses used slely fr the purpses f the nnprfit schl fd service. As defined in federal law, the nnprfit schl fd service accunt means the restricted accunt in which all f the revenue frm all fd service peratins cnducted by the SFA principally fr the benefit f schlchildren is retained and used nly fr the peratin r imprvement f the nnprfit schl fd service. Revenue means all mnies received by r accruing t the nnprfit schl fd service including, but nt limited t, children s payments, earnings n investments, ther lcal revenues, state revenues and federal cash reimbursements. Califrnia Educatinal Cde (EC) requires all revenues frm the sales f fd t be depsited int the cafeteria fund accunt and spent n the maintenance, imprvement, and peratin f the cafeteria. State law authrizes expenditures frm the cafeteria fund nly fr thse charges defined in the Califrnia Schl Accunting Manual (CSAM) r by the Califrnia Department f Educatin (CDE) Nutritin Services Divisin (NSD) in accrdance with federal regulatins. T view r dwnlad the CSAM, please visit the CDE Finance and Grants Web page at As part f the AR, a risk assessment is cnducted by state staff t determine if the SFA is at an increased risk f nncmpliance with federal financial requirements. The review includes the fllwing integral areas t assess the SFA s financial health. These areas include: Maintenance f the cafeteria fund (nnprfit schl fd service accunt) PLE Revenue frm nnprgram fds Indirect csts SFAs determined t be at an increased risk f nncmpliance with federal financial requirements (per Title 7, Cde f Federal Regulatin (CFR), Sectin , 7 CFR, Part 250 and Title 2 CFR, Part 200) will receive a cmprehensive review fr all areas within resurce management as part f the AR, including state laws that gvern the management f an SNP. The U.S. Department f Agriculture (USDA) requires an AR f all SFAs participating in the SNP at least nce during each three-year review cycle. The CDE created a Web page that prvides guidance, federal regulatins, and resurce materials cvering allwable uses fr cafeteria funds. The Cafeteria Fund Guidance is lcated n the CDE Web page at SNP Online Training Page 2

3 2. Cafeteria Funds SFAs participating in the federal SNP must bserve bth state and federal limitatins n the use f cafeteria funds as set frth in 7 CFR, sectins and Necessary, Reasnable, and Allcable The ver-riding cst principle fr charges t the cafeteria fund is that they must be necessary and reasnable fr prper and efficient perfrmance and administratin f the federal award (reimbursement) (2 CFR, Part 200, Subpart E). This requires csts t: Benefit the prgram Necessary fr perfrmance r administratin f the grant Fllw sund business practices Include arm s length bargaining Fllw federal, state, and lcal laws Fllw terms f the grant award (federal and state requirements) Be the market price fr cmparable gds and services Be prudent and nt deviate frm standard practice Meet the needs, but des nt exceed beynd what is necessary Allcable charges may be made t the cafeteria fund nly in prprtin t the relative benefit received by the prgram. Fr example, if a vehicle is purchased that is necessary and prudent and will be used slely by the fd service prgram, it may be charged t the cafeteria fund. Land and Building SFAs may nt use funds (revenues) frm the cafeteria accunt t buy land, buildings, r t build buildings withut prir apprval frm the USDA Fd and Nutritin Service (FNS), and an apprved waiver f EC sectins and frm the State Bard f Educatin. Specifically, 7 CFR, Sectin (a), nnprfit schl fd service states: Revenues received by the nnprfit schl fd service are t be used nly fr the peratin r imprvement f such fd service, except that, such revenues shall nt be used t purchase land r buildings, unless therwise apprved by FNS (USDA), r t cnstruct buildings. Expenditures f nnprfit schl fd service revenues shall be in accrdance with the financial management system established by the state agency under Sectin (a) f this part. (Emphasis added). SNP Online Training Page 3

4 State law aligns with the regulatin cited abve. Specifically, EC Sectin states, The cst f husing and equipping cafeterias is a charge against the funds f the schl district. Whenever there is a cnflict between state and federal laws and regulatins, yu must fllw the stricter law r regulatin. Capital Expenditures The USDA requires the CDE t apprve expenditures fr fd service equipment and repairs, maintenance, r alteratins t equipment, nly if the ttal equipment per unit cst is $5,000 r greater. T ease the burden n SFAs, the CDE develped a list f USDA preapprved equipment. The Capital Expenditure Apprved List is available n the CDE Cafeteria Funds Guidance Web page at: If an SFA purchases equipment with a unit cst f $5,000 r greater that is nt n the Capital Expenditure Apprved List, the SFA must submit a request t the CDE fr apprval prir t purchasing the item. Requests fr prir apprval must be sent by t snpcafefundquestins@cde.ca.gv with the fllwing infrmatin: Subject line: Capital Expenditure Request, indicating if it is an emergency request, and yur district r agency name Bdy f the must include: SFA Name, Child Nutritin Infrmatin and Payment System(CNIPS) identificatin (ID) number (#), cntact infrmatin (phne and address) Describe the equipment, including the purpse and hw it supprts the peratin r maintenance f the nnprfit schl fd service Prvide an estimated cst and whether r nt yu have sught bids Describe hw the ld equipment (if any) will be dispsed f and acknwledge that any prceeds frm the dispsitin will be used t ffset the cst f the replacement Acknwledge that any equipment purchased will be used exclusively (100 percent) by the nnprfit schl fd service Dcumentatin SFAs must dcument any and all expenditures and purchases must have invices and receipts. In additin, the purchase rder, prf f delivery r perfrmance, and any final apprvals shuld be available fr audit. CSAM, Prcedure 905, states that persnnel expenditures directly charged t the cafeteria fund must be dcumented with a peridic certificatin r a persnnel activity reprt (PAR). SNP Online Training Page 4

5 An emplyee wh wrks slely n ne activity (ne cst bjective) that is funded by a single federal surce,(i.e., fd service wrker, fd delivery driver, FSD [thse preparing and serving meals]) may dcument time thrugh a semi-annual certificatin that states 100 percent f their time is devted t nly fd service activities. In accrdance with CSAM, Prcedure 905, the Peridic Certificatin: (1) is prepared at least semi-annually, (2) certifies that the emplyee wrks 100 percent n that prgram fr the perid cvered by the certificatin, and (3) is signed by the emplyee r supervisry fficial having first-hand knwledge f the wrk perfrmed by the emplyee. Blanket semi-annual certificatins identifying all emplyees wrking 100 percent n the funding surce and signed by the supervisr having first-hand knwledge f the wrk being perfrmed by the emplyees is acceptable dcumentatin. An emplyee wh wrks n multiple cst bjectives, (i.e., custdians, warehuse and maintenance wrkers, prgram directrs, business ffice administratrs, etc.), wuld be required t dcument their time thrugh a PAR r equivalent dcumentatin. PAR r equivalent dcumentatin must: (1) reflect an after-the-fact distributin f the actual activities f each emplyee, (2) accunt fr the ttal activities fr which each emplyee is cmpensated, (3) be prepared at least mnthly and cincide with ne r mre pay perids, and (4) be signed by the emplyee Neither the CDE nr federal regulatins require the SFA t use a specific PAR frm. The SFA may use either the sample PAR in the CSAM, Prcedure 905, r its wn PAR (as lng as the PAR satisfies all f the requirements fund n CSAM, Prcedure 905). Fr CNPs, the NSD recmmends that SFAs use a PAR similar in detail t the attached CDE Sample Pernnel Activity Reprt at Fr audit purpses, SFAs may need t prvide additinal dcuments t substantiate the infrmatin reprted n PARs. Fr emplyees whse time is unpredictable and varies significantly frm day t day, a mre detailed PAR may be apprpriate. Hurly time accunting is the methd mst acceptable t auditrs, and the safest apprach is t prvide mre dcumentatin rather than less. Management Bulletin (MB) SNP , Dcumenting Emplyee Time and Effrt in Federal SNPs is lcated n the CDE Web page at This MB prvides guidance t SFAs abut federal requirements pertaining t dcumentatin f emplyee time and effrt by SFA emplyees whse salaries and wages are supprted by federal funds. Califrnia Educatin Cde In additin t federal regulatins, the EC als gverns the cst principles fr the cafeteria fund. EC Sectin 38101(d)(e) requires a written explanatin f the purpse f and basis fr any charges t, r transfers frm, a cafeteria fund and des nt authrize an SFA t charge the cafeteria fund fr any charges prhibited by state r federal law r regulatin. SNP Online Training Page 5

6 3. Net Cash Resurces Net cash resurces (NCR) is defined in federal regulatins as all mnies as determined in accrdance with the state agency's established accunting system that are available t r have accrued t an SFA s nnprfit schl fd service at any given time, less cash payables. Such mnies may include, but are nt limited t, cash n hand, cash receivable, earnings n investments, cash n depsit, and the value f stcks, bnds r ther negtiable securities. The SFA shall limit its NCR t an amunt that des nt exceed three mnths average expenditures fr its nnprfit schl fd service r such ther amunt as may be apprved by the state agency in accrdance with 7 CFR Sectin (a). It is recmmended that SFAs calculate their NCR at least annually. The CDE has prvided a sample calculatr that can assist an SFA with calculating their NCR. The sample calculatr is lcated in the Dwnlad Frms sectin f the CNIPS Frm SNP 57: Sample Net Cash Resurces Calculatr Tl. T ensure cmpliance with these regulatins, the CDE is required t mnitr, thrugh review, audit, r by ther means, the NCR f the nnprfit schl fd service. If excess NCR are identified during an AR, the SFA must enter int a Spending Plan. The AR Spending Plan is in respnse t an AR crrective actin plan and is referred t as a reactive spending plan. If cafeteria fund excess NCRs are identified during a lcal educatinal agency (LEA) AR, the LEA is ut f cmpliance, and a preapprved Spending Plan fr up t three years is required as part f the crrective actin. Spending Plans will be prcessed thrugh the CDE NSD Resurce Management Unit (RMU). If excess NCRs are identified utside f an AR, then a budget agreement ptin is available t align the SFA s cafeteria fund t an apprximate three-mnth expenditure threshld. A budget agreement is a practive measure fr an SFA t align their NCRs t federal requirements. LEAs that have identified their cafeteria fund balance as having excess NCRs and are nt currently in the AR prcess may enter int a budget agreement with the CDE NSD RMU. With a budget agreement, the LEA wrks with the RMU t create a spend-dwn plan t address their NCRs excess. The budget agreement allws the LEA t emply the fllwing expenditure ptins t draw dwn their excess NCRs: Making capital expenditures Increasing staffing levels Imprving nutritinal fd quality Prviding staff training All budget agreement requests must be submitted by t SNPCAFEFUNDQUESTIONS@cde.ca.gv. SNP Online Training Page 6

7 Please use the fllwing frmat: Subject line must include: Assistance being requested and yur district r agency name (e.g., budget agreement, PLE, nnprgram revenue, r capital expenditure) (Example: expenditure request and ABC Unified Schl District) Bdy f must include: SFA Name CNIPS ID # Descriptin f the issue If capital expenditure request, explain why the equipment is necessary and prudent Revenue Sharing SFAs participating in SNPs that partake in revenue sharing thrugh Memrandums f Understanding (MOU) are nt allwed. SFAs may cntinue t purchase fd fr a Parent Teacher Assciatin (PTA) r student bdy assciatin with the implementatin f an agreement set frth between bth parties. The agreement must disclse all cst(s), including labr t purchase and prepare any fd items. In additin, all agreement terms must be satisfied befre any revenue can accrue t the rganizatin. Fr additinal infrmatin, see MB NSD-SNP , Revenue Sharing in SNPs lcated n the CDE Web page at 4. Paid Lunch Equity Sectin 205 f the Healthy, Hunger-Free Kids Act f 2010 (HHFKA) requires SFAs participating in the Natinal Schl Lunch Prgram (NSLP) t determine their WAP fr paid student lunches in the previus schl year, and gradually increase the SFA s paid lunch price until it is equal t r greater than the difference between the free meal reimbursement and the paid reimbursement rates fr the previus schl year. SFAs are nt required t increase paid lunch prices by mre than $0.10 per schl year (SY), althugh SFAs may pt t raise their prices by mre than $0.10 per SY and use the amunt ver $0.10 as carryver in future years. The PLE requirement was develped t ensure that SFAs prvide sufficient funds t their cafeteria fund fr paid lunches and thereby avid using cafeteria funds intended t cver the cst f free and reduced-price lunches t cver csts fr paid lunches. SNP Online Training Page 7

8 SFAs participating in the NSLP are required t: Annually establish paid meal prices in accrdance with the prcedures in the HHFKA Annually calculate their WAP fr paid lunches Adpt ne f the tw ptins listed belw r a cmbinatin f the tw ptins if charging less fr a paid lunch than the difference between the federal reimbursement fr free and paid lunches ($2.70 fr SY and $2.78 fr ): Gradually increase their average lunch price, r Prvide a nnfederal funding cntributin t their cafeteria fund accunt t cver the difference The CDE will verify that SFAs are making accurate price calculatins and mdificatins during the AR t ensure SFA cmpliance with this new requirement. Paid lunch participatin at sites that participate in Prvisins 1, 2, r 3 r the Cmmunity Eligibility Prvisin (CEP) are nt included in the calculatin f a WAP. If all f an SFA s sites are participating in Prvisins 1, 2, r 3, r the CEP, then the SFA is nt required t calculate their WAP r cmplete the PLE calculatin tl. Fr help with calculatins, please visit the USDA PLE Calculatin Tl Web page at Fr further guidance, see MB USDA-SNP , PLE Updated Guidance fr SY and lcated n the CDE MB Web page at asp. Additinal resurces are lcated n the USDA Plicy Memrandum Equity in Schl Lunch Pricing Fact Sheet Web page at 5. Nnprgram Fd Revenues Sectin 206 f the HHFKA requires that an SFAs sale f nnprgram fds generate at least the same prprtin f revenues t fd csts. Nnprgram fds are defined as fd and beverages, ther than a reimbursable meal, sld in a participating schl and purchased using funds frm the cafeteria fund. The different types f nnprgram fds can include, but are nt limited t: A la carte fd items sld in cmpetitin with schl meals Adult meals Items purchased fr fundraisers, vending machines, schl stres, catering, special schl banquet functins, and vended meals Sale f a secnd meal SNP Online Training Page 8

9 Prgram fds are federally reimbursable lunches, breakfasts, and snacks served in the NSLP and the Schl Breakfast Prgram (SBP). SFAs must calculate their nnprgram fd revenues and make all dcumentatin f such calculatins available upn request and during an AR t ensure cmpliance. T implement this requirement, SFAs must identify and track the fllwing infrmatin fr an entire schl year (e.g., ) and must have data frm the prir year (SY ) fr their AR: All nnprgram fd csts separated frm prgram fd csts All nnprgram revenues separated frm prgram fd revenues Annually, SFAs must review their financial data t ensure that revenues frm prgram meals d nt subsidize nnprgram fds. By tracking revenues and fd csts separately, an SFA will be able t determine the fllwing: If the prprtin f nnprgram fd revenues t prgram fd revenues is greater than r equal t the prprtin f the nnprgram fd csts t ttal fd csts, then n additinal actin is required. Ttal nnprgram fds revenue r ttal revenue Ttal nnprgram fds csts r Ttal Fd Csts N actin required in this equatin. If the prprtin f nnprgram fd revenues t prgram fd revenues is less than the prprtin f nnprgram fd csts t prgram fd revenue fd csts, then the SFA is ut f cmpliance and must make necessary adjustments, r use nnfederal funds t make up the difference. Ttal nnprgram fds revenue r ttal revenue Ttal nnprgram fds csts r ttal fd csts Out f cmpliance in this equatin and must make adjustments. SNP Online Training Page 9

10 The fllwing table and steps demnstrate hw t calculate cmpliance with this prvisin: Annual SNP Csts Amunt Cst fr reimbursable meal fd $450,000 Cst f nnprgram fds $50,000 Ttal fd csts $500,000 Ttal nnprgram fds revenue $120,000 Ttal prgram fds revenues $1,000,000 Additinal revenues needed fr cmpliance $0 Step 1 Determine the rati between nnprgram fd csts and ttal fd csts (Using the example abve: $50,000/$500,000 = 0.1 X 100 = 10 percent) Step 2 Determine a nnprgram fd revenue target. In this example, the revenue frm the nnprgram fds must equal ten percent r mre f the ttal prgram revenue. (Using the example abve: $1,000,000 x 10 percent = $100,000) Therefre, the SFA must receive $100,000 r mre in revenue frm the sale f nnprgram fds t be in cmpliance. Step 3 Determine the ttal nnprgram revenue. (Using the example abve: $120,000 ttal nnprgram revenue) Therefre, the SFA is able t dcument that the nnprgram fd revenue received is greater than r equal t the nnprgram fd revenue target calculated in Step 2 (which is $100,000). T the extent that revenues fall shrt f the revenue target, SFAs must take actin t either increase á la carte prices r invest additinal nnfederal funds in the cafeteria fund frm surces utside the cafeteria fund. SFAs must keep all recrds related t prgram and nnprgram fd csts and revenues in rder t dcument cmpliance in this area. SNP Online Training Page 10

11 Fr mre infrmatin, review MB-SNP Revenue frm the Sale f Nnprgram Fds lcated n the CDE MB Web page at asp. The Nnprgram Revenue Calculatr Tl is lcated n USDA Web page at 6. INDIRECT COST GUIDANCE Indirect csts are agency-wide, general management csts. General management csts cnsist f administrative activities necessary fr the general peratin f the agency, such as accunting, budgeting, payrll preparatin, persnnel services, purchasing, and centralized data prcessing. The CDE is the recgnized agency authrized t establish indirect cst rates fr Califrnia SFAs under the terms f a delegatin agreement and indirect cst plan negtiated with the U.S. Department f Educatin. The terms f the agreement are renegtiated peridically and are binding n all federal agencies pursuant t 2 CFR, Part 200. The terms f the agreement are reflected in the guidance n indirect csts fr Califrnia SFAs cntained in CSAM, Prcedure 915. The CDE annually updates indirect cst rates and psts them n the CDE s Web page at Indirect csts must be claimed based n actual prgram expenditures rather than n budget estimates and SFAs can nly charge the lesser f the SFA apprved indirect cst rate r the statewide average fr fd service. Fr SY , the statewide average indirect cst rate is 5.11 percent. A list f indirect cst rates by district is lcated n the CDE Web page at In additin, the USDA released a manual t prvide guidance t spnsrs n matters cncerning indirect csts. Due t the cmplexity f this issue, the NSD strngly recmmends that NSLP and SBP spnsrs review USDA Plicy Memrandum SP Indirect Cst Guidance Manual with their business fficers, accunting fficials, and legal representatives t ensure that they apply crrect indirect csts t the cafeteria fund. The Indirect Cst Guidance Manual is lcated n the USDA Web page at In cases where guidance frm surces ther than CSAM, Prcedure 915, cnflict with the guidance in CSAM, SFAs must fllw the guidance in CSAM. Direct Csts Direct csts are thse csts that prvide measurable, direct benefits t a prgram. Typical direct csts that may be charged t the cafeteria fund accunt include: Salaries f FSDs, supervisrs, managers, cks, kitchen helpers, and clerks Salaries f custdians and ther emplyees wh dcument their time spent n fd SNP Online Training Page 11

12 service by cmpleting a persnal activity reprt (PAR) r equivalent dcumentatin and have a jb descriptin detailing such wrk Emplyee benefits fr all emplyees in this prgram Fd Laundry f fd services unifrms, twels, etc. Csts f purchase and peratins f vehicles used in the delivery f fd t varius lcatins Insurance n vehicles used slely fr and by fd service Repair and maintenance f equipment used in the prgram Acquisitin and replacement f related equipment (frm the preapprved list r with prir CDE apprval) 7. PROCUREMENT Prcurement is the multistep prcess fr acquiring the best pssible gds and services at the lwest pssible price. All purchases, whether funded whlly r in part with SNP funds, must be cnducted accrding t federal and state prcurement requirements. State and federal laws and regulatins require all prcurements t be cnducted in a manner that prmtes full and pen cmpetitin (7 CFR and 2 CFR [a]). All spnsrs are required t have a written prcurement plan, prcedures, and a written cde f cnduct. The prcurement plan is specific t each district. The plan must identify the prcurement methds used fr the varius prducts and services prcured, steps fr staff t fllw, and wh is respnsible fr each prcurement ptin and activity. Each district is respnsible fr develping their wn plan and prcedures based n their facility peratin. Please refer t the USDA Plicy Mem SP Lcal Agency Prcurement Reviews: Schl Year n the USDA s Plicy Web page at This dcument will utline requirements t include in yur written prcedures. The written cde f cnduct was a requirement in 7 CFR Part 3016 and 3019 and nw in 2 CFR Part (c)(1). SFAs are required t have a written cde f cnduct t prhibit real r apparent cnflicts f interest and ne that includes disciplinary actins fr vilatins. The fllwing link prvides a sample written cde f cnduct SJ.rg/mdules15_16/Cde_f_Cnduct.pdf. Management Bulletin (MB) CNP , Written Cdes f Cnduct and Perfrmance f Emplyees Engaged in the Prcurement, Award, and Administratin f Cntracts, is available at the CDE NSD Web page at SNP Online Training Page 12

13 This MB prvides clarifying guidance t all agencies participating in the federal CNP regarding USDA and Califrnia regulatins that require CNP agencies t have a written cde f cnduct cvering prcurement practices. This MB applies t all participating in CNP, schl districts, cmmunity-based rganizatins, childcare centers, and spnsrs. New: 2 CFR Part General prcurement standards. (a) The nnfederal entity must use its wn dcumented prcurement prcedures, which reflect applicable state, lcal, and tribal laws and regulatins, prvided that the prcurements cnfrm t applicable federal law and the standards identified in this part. (b) Nnfederal entities must maintain versight t ensure that cntractrs perfrm in accrdance with the terms, cnditins, and specificatins f their cntracts r purchase rders. (c)(1) The nnfederal entity must maintain written standards f cnduct cvering cnflicts f interest and gverning the actins f its emplyees engaged in the selectin, award, and administratin f cntracts. N emplyee, fficer, r agent may participate in the selectin, award, r administratin f a cntract supprted by a federal award if he r she has a real r apparent cnflict f interest. Such a cnflict f interest wuld arise when the emplyee, fficer, r agent, any member f his r her immediate family, his r her partner, r an rganizatin which emplys r is abut t emply any f the parties indicated herein, has a financial r ther interest in r a tangible persnal benefit frm a firm cnsidered fr a cntract. The fficers, emplyees, and agents f the nnfederal entity may neither slicit nr accept gratuities, favrs, r anything f mnetary value frm cntractrs r parties t subcntracts. Hwever, nnfederal entities may set standards fr situatins in which the financial interest is nt substantial r the gift is an unslicited item f nminal value. The standards f cnduct must prvide fr disciplinary actins t be applied fr vilatins f such standards by fficers, emplyees, r agents f the nnfederal entity. When making prcurement decisins, SFAs and ther CNP peratrs must fllw the subsequent fur fundamental principles: 1. Buy American prvisin, which requires schls t purchase dmestically grwn and prcessed fds t the maximum extent practicable. 2. State and lcal regulatins may be mre restrictive than federal plicies. If a state r lcal threshld is mre restrictive, it always supersedes the federal threshld. Lcal gvernments and schl districts may set even mre restrictive threshlds. 3. Full and pen cmpetitin means free f factrs that inhibit cmpetitin. All ptential suppliers are n a level playing field and have the pprtunity t cmpete based n a knwn set f standards. 4. Respnsible and respnsive vendrs. T be cnsidered respnsive, vendrs must cnfrm t all f the SFA s stated terms and cnditins utlined in the slicitatin. Fr example, if an SFA issues a slicitatin fr apples and the vendr respnds with a bid fr peaches, the vendr is nt respnsive. T be cnsidered respnsible, vendrs must be capable f perfrming successfully under the terms and cnditins f the cntract. Fr example, if an SFA requires that respnders prvide evidence f past SNP Online Training Page 13

14 success in meeting delivery times and, upn calling the respnder s references, learns that the vendr has a pr track recrd regarding n-time deliveries, the vendr wuld nt be cnsidered respnsible. Federal, state, and lcal regulatins and plicies prvide the framewrk fr which each SFA prcures fd, supplies, and services. Prper prcurement practices are transparent t all and ensure fairness and integrity. Specific Federal and State Laws and Regulatins 2 CFR Part b7194ddf8&nde=2: &rgn=div5#2: : Sectins Prcurement standards Sectin State authrity Sectin Requires all CNP spnsrs t establish prcurement prcedures 7 CFR Part fe a9&mc=true&nde=pt &rgn=div5 Sectin Fd service management cmpanies Sectin State agency requirements Sectin Prcurement standards NSLP 7 CFR Part fe a9&mc=true&nde=pt &rgn=div5: Sectins , , and (j) guidance n fd service management cmpanies and prcurement standards and prvisins Child And Adult Care Fd Prgram 7 CFR Part e36336a&mc=true&nde=pt &rgn=div5: Sectins Prcurement standards Summer Fd Service Prgram Califrnia EC Sectins 45103, ,and District emplyment practices Califrnia Public Cntract Cde Sectins includes regulatins fr cntracts awarded by schl districts subject t Part 21 (cmmencing with Sectin 35000) f Divisin 3 f Title 2 f the EC SNP Online Training Page 14

15 Refer t the prcurement chart belw fr an verview f the different prcurement ptins. Prcurement Optins Federal Threshld = $150,000 Califrnia Threshld 2015= $86, = $87,800 Infrmal Cst is at r belw the lwest f the federal, state, r lcal threshld Frmal Cst exceeds the lwest f the federal, state, r lcal threshld Micr-Purchases Value f purchases may nt exceed $3,500 Small Purchases Cmpetitive Sealed Bids (IFBs) Cmpetitive Prpsals (RFPs) Nncmpetitive Prpsals Infrmal Prcurement Optins Micr-Purchases The micr-purchase ptin is fr purchases where the aggregate value in a single transactin is under $3,500. This enables schls t purchase supplies r services withut sliciting cmpetitive qutes, if the schl cnsiders the price reasnable. SFA s may purchase prducts and services (similar r dissimilar purchased at nce as a single, cllective unit) whse aggregate cst des nt exceed $3,500 in a single transactin. Effective Octber 1, 2015, the micr-purchase threshld defined in 2 CFR was raised frm $3,000 t $3,500. The micr-purchase threshld is subject t adjustments due t inflatin. The determinatin that the price is reasnable and dcumentatin fr the purchases must be included in a prcurement file and must fllw the SFA s written prcurement prcedures. The prcedure shuld include hw the SFA will attempt t distribute the micr-purchases amng qualified surces. SNP Online Training Page 15

16 Small Purchases The small purchase ptin is fr securing services, supplies, r prperty that may be used when the anticipated acquisitin will fall belw the small purchase threshld. State and lcal regulatins ften set lwer small purchase threshlds that are mre restrictive than the federal level. In applying the small purchase threshld, the SFA must adhere t the mst restrictive, lwest limit set. Current small-purchase threshld amunts are: Federal $150,000 State 2015 = $86,000 and 2016 = $87,800 Lcal varies SFAs shuld always use the mst restrictive threshld that applies. The Califrnia smallpurchase threshld, effective January 1, is adjusted annually and published in the Bid Threshld Adjustment letter, which is available n the CDE Crrespndence Web page at If small purchase prcedures are used, price r rate qutatins shall be btained frm an adequate number f qualified surces. Charter schls wuld use the federal threshld since they are exempt frm EC. It is nt necessary t publish a written slicitatin when using the infrmal prcurement methd. Yu d need t have written specificatins t slicit qutes. It is imprtant t dcument t ensure that each vendr cntacted receives identical infrmatin and that yu can verify whm yu cntacted fr yur qutes. Remember yur written prcurement plan must include the prcedures fr small purchases. Frmal Prcurement Optins Frmal prcurement ptins are used when the cntract value is at r abve the small purchase threshld. The frmal prcurement ptins are mre rigrus and publicized mre widely. All SFAs must pst a public advertisement in a newspaper f general circulatin when fllwing the frmal prcurement ptin. The advertisement must run fr tw cnsecutive weeks. In additin, SFAs may pst the advertisement t their Web site, and SFAs may cntact ther cmpanies by phne r that prvide the gds r services the agency is seeking. Public schl districts and COEs must have tw advertisements, ne week apart, in a newspaper f general circulatin (Califrnia PCC, sectin ). In additin, SFAs can pst the bid n trade Web sites. SNP Online Training Page 16

17 Cmpetitive Sealed Bidding An Invitatin fr Bid (IFB) is a type f slicitatin used when the primary cnsideratin is cst and the expectatin is that cmpetitive bids will be received and an award will be made t the respnsive and respnsible respndent whse publicly pened bid is lwest in price. An IFB describes in detail the services r prducts required and awards the cntract t the lwest respnsive, respnsible bidder. Fr example, an IFB is used fr canned and staple fds. IFBs are publicly slicited and a firm-fixed-price cntract (lump sum r unit price) is awarded t the respnsible bidder whse bid, cnfrming with all the material terms and cnditins f the invitatin fr bids, is the lwest in price. 1. The fllwing cnditins shuld be present: a. A cmplete, adequate, and realistic specificatin r purchase descriptin is available; b. Tw r mre respnsible bidders are willing and able t cmpete effectively and fr the business; and c. The prcurement lends itself t a firm fixed price cntract and the selectin f the successful bidder can be made principally n the basis f price. 2. The fllwing requirements apply: a. The IFBs will be publicly advertised and bids shall be slicited frm an adequate number f knwn suppliers, prviding them sufficient time prir t the date set fr pening the bids; b. The IFBs, which will include any specificatins and pertinent attachments, shall define the items r services in rder fr the bidder t prperly respnd; c. All bids will be publicly pened at the time and place prescribed in the IFB; d. A firm fixed-price cntract award will be made in writing t the lwest respnsive and respnsible bidder. Where specified in bidding dcuments, factrs such as discunts, transprtatin cst, and life cycle csts shall be cnsidered in determining which bid is lwest. Payment discunts will nly be used t determine the lw bid when prir experience indicates that such discunts are usually taken advantage f; and e. Any r all bids may be rejected if there is a sund dcumented reasn. Cmpetitive Prpsals A Request fr Prpsal (RFP) is als a frmal prcurement ptin. The RFP describes in a general way what is needed and requests that vendrs submit a prpsal fr servicing the needs f the district. The RFPs require the prspective vender t submit a technical prpsal that explains hw they will meet the bjectives f the slicitatin dcument and a cst element that identifies the csts t accmplish their prpsal. SNP Online Training Page 17

18 The RFP is used when price, while still the majr cnsideratin is nly ne f the evaluatin criteria used t determine the best prducts r services that meet the specificatins. The RFP allws fr negtiatins and evaluatin criteria t btain the best value fr the price. RFPs are used when tw r mre bidders that are respnsible, willing, and able t submit an ffer. Either a fixed-price r cst-reimbursement type cntract is awarded. The fllwing requirements apply: Requests fr prpsals are publicized and identify all evaluatin factrs and their relative imprtance. Any respnse t publicized requests fr prpsals shall be hnred t the maximum extent practical; Prpsals are slicited frm an adequate number f qualified vendrs; SFAs have a methd fr cnducting technical evaluatins f the prpsals received and fr selecting awardees; and Awards are made t the respnsible firm whse prpsal is mst advantageus t the prgram, with price and ther factrs cnsidered, but with the lwest cst/price as the primary factr. When develping an RFP include: The anticipated terms and cnditins f the cntract A date, time, and place fr prpsal submissin An explanatin f what infrmatin and dcuments the respndent must include in their prpsal A descriptin f hw technical and cst factrs will be evaluated in making final determinatins A statement whether the cntract is fixed-price r cst-reimbursable A statement that the award will be made, n the basis f price and ther factrs, t the respnsive and respnsible firm r individual whse bid is mst advantageus t the LEA The gal f bth the cmpetitive sealed bidding (IFB) and cmpetitive prpsals (RFP) methds is t btain the best valued prduct at the lwest price. T be cnsidered respnsive, a vendr/bidder must submit a respnse t the IFB r RFP that cnfrms t all material terms and cnditins f the slicitatin. Remember yur written prcurement plan must include the prcedures fr frmal purchase. SNP Online Training Page 18

19 Nncmpetitive Prpsal Nncmpetitive prpsal is a prcurement methd used when cmpetitin is deemed inadequate r impssible, r the public need is urgent r an emergency. Negtiatins must include bth price and terms using the same prcedures that wuld be fllwed fr cmpetitive prpsals. Prcurement by nncmpetitive prpsals may be used nly when the award f a cntract is infeasible under small purchase prcedures, sealed slicitatins, r cmpetitive prpsals and ne f the fllwing circumstances applies: The item is available nly frm a single surce. The public urgency r emergency fr the requirement will nt permit a delay resulting frm cmpetitive slicitatin. The state agency authrizes nncmpetitive prpsals in respnse t a written request frm SFA. After slicitatin f a number f surces, cmpetitin is determined inadequate All nncmpetitive prpsal requests must be submitted by t SFSCONTRACTS@cde.ca.gv. Please use the fllwing frmat: Subject line must include: Request t award using nncmpetitive prpsals Bdy f must include, at a minimum: 1. A histry f the prcurement, t include: a. Prir slicitatins released, and their result b. Market research accmplished 2. An explanatin f why the request is necessary based n the criteria set by 2 CFR (d). The explanatin must nt just state that a sle surce was fund, r a public urgency exists, but must detail why the criteria is met. 3. A plan t avid future nncmpetitive prpsals fr the same gd r service, if avidance is feasible. 4. Full cntact infrmatin fr the SFA s prcurement fficer requesting the apprval, and vendrs cntacted and/r slicited. SNP Online Training Page 19

20 Cperative Purchasing Grups Cperative purchasing ccurs when grups f peple r entities jin t accmplish all r part f the steps in the purchasing prcess. Cperative purchasing is a system aimed at using grup purchasing in an effrt t increase buying pwer, reduce csts, and imprve the quality f prducts and services available t members. The purpse f a cperative purchasing grup is t use the cllective buying pwer and expertise f the grup t btain the highest quality prducts at the best price. Fr mre infrmatin, refer t the ICN Prcurement in the 21 st Century lcated at Prcurement Prcess All prcurement transactins must be cnducted in a manner that prvides full and pen cmpetitin cnsistent with prcurement standards. Full and pen cmpetitin means that all suppliers are n a level playing field and thereby have the same pprtunity t cmpete. Fairness and integrity in all aspects f the prcurement prcess are critical t achieving full and pen cmpetitin. Cmpetitin is essential t ensure lw cst and quality gds and services. The fllwing are examples f what is cnsidered restrictive cmpetitin: Placing unreasnable requirements n vendrs in rder fr them t qualify t d business (i.e., must have at least tw drivers at all times when delivering the fd), Having rganizatinal cnflicts f interest (i.e., vendr is sn f schl nutritin directr), Having unnecessary bnding and experience requirements (i.e., vendr must be in business fr a minimum f ten years), and Specifying nly a brand name prduct instead f allwing a preapprved equal prduct t be ffered (i.e., will nly accept XYZ brccli spears). SFAs shuld cntinuusly refer t the fllwing basic steps in the prcurement prcess: Planning this step includes a needs assessment, frecasting, and budgeting. Make sure t include these steps in yur written prcurement plan fr each type f prcurement. The schl shuld be able t answer the fllwing questins: What gds r services are needed? Are these gds r services available fr purchase? Will delivery be necessary? When and where are they needed? Hw much is needed? SNP Online Training Page 20

21 Determining threshld what methd f prcurement is needed fr the gds r services. Drafting specificatins this dcumentatin must include all the details such as descriptins, and requirements fr gds r services. Advertising a slicitatin nce drafted, SFAs must prvide this infrmatin t ptential vendrs (farmers, vendrs, distributrs, r ther businesses) wh might be able t fulfill yur needs as described. Fllw the requirements as indicated fr frmal r infrmal prcurement ptins. Evaluating and awarding a cntract establish evaluating criteria and then award t the mst respnsive and respnsible bidder(s) wh is able t meet yur needs and prvide the gds and services as described. Managing the cntract nce awarded, cntinue t manage and dcument the cntract t ensure that everything is prvided accrding t the specificatins and cntract terms. Fd Service Management Cntracts SNP regulatins under 7 CFR, Sectin 210.2, define a Fd Service Management Cntracts (FSMC) as a cmmercial enterprise r a nnprfit rganizatin which may be cntracted with the SFA t manage any aspect f the schl fd service. Therefre, a cmpany is cnsidered an FSMC if it perfrms a cmbinatin f services, such as: Preparing, delivering, r serving meals* Cnducting pint f service (POS) meal cunts Cllecting student eligibility data in cnnectin with meal service Prviding meal cunt data t the SFA Preparing claims fr SFA apprval and submissin Develping menus and menu prductin recrds Purchasing fd, supplies, r equipment Prviding prgram guidance and training Overseeing cmpliance Implementing ther activities that wuld nrmally be perfrmed by the SFA SNP Online Training Page 21

22 *EC Sectin prhibits public schls and COEs frm entering int cntracts fr the preparatin, delivery, and service f meals unless they can prvide evidence t the CDE that they have had n fd service emplyees since July 1, 1977, r have n r inadequate facilities in which t prepare meals. Prir t cntracting fr the preparatin, delivery, and service f meals, public schls and COEs must btain written respnses frm every schl district in the cunty and the COE that they are nt willing r are unable t prvide meals. At such time as this requirement is met, public schls and COEs may request CDE apprval t cntract with a private meal vendr fr the preparatin, delivery, and service f meals. SFA Respnsibility Retained If an SFA cntracts with an FSMC, statutes and regulatins require the SFA t retain general managerial cntrl ver their nnprfit schl fd service peratins. The SFA shall retain cntrl f the quality, extent, and general nature f their fd service peratins and the prices charged t children fr meals, including: Establishment and maintenance f the nnprfit schl fd service accunt Develpment and adjustment f the 21-day cycle menu that must be issued as part f the RFP Retentin f signature authrity n the SFA s Permanent Single Agreement with the CDE, claims fr reimbursement and the nnprfit schl fd service accunt, and the submissin f claims fr reimbursement Assurance f lunch cunt accuracy prir t submissin f the mnthly claim Retentin f financial respnsibility fr the schl fd service prgram Use f Prgram Funds in FSMC Prcurements SFAs cannt use nnprfit schl fd service accunt funds (cafeteria funds) t pay fr prcurement that des nt cmply with applicable regulatins. Thse payments wuld be unallwable expenditures The CDE must review and apprve all new and renewing FSMC cntracts and supprting dcumentatin Cst-reimbursable FSMC cntracts and slicitatin dcuments must clearly specify that allwable csts shall be paid frm the cafeteria fund after deducting all discunts, rebates, and applicable credits All dcuments and cntracts must require enugh infrmatin t permit identificatin f allwable and unallwable csts and the specific amunts f all discunts, rebates and credits SFAs must ensure that all csts paid frm the cafeteria fund are allwable SNP Online Training Page 22

23 SFAs and LEAs must mnitr FSMC cmpliance n an nging basis and strictly enfrce all cntract prvisins Fr mre infrmatin and resurces, see MB SNP Prcuring and Mnitring f FSMC Cntracts n the CDE MB Web page at Bid Prcess fr Fd Service Management Cmpany Cntracts FSMC cntracts must fllw a cmpetitive bidding prcess using frmal r infrmal bidding prcedures. Hwever, SFAs must submit all bid dcuments t the CDE NSD Schl Fd Service Cntracts Unit (SFSCU) fr apprval prir t issuance (7 CFR, sectins [a][5]). Bid dcuments may be sent by t SFSCONTRACTS@cde.ca.gv. Fr detailed infrmatin n the prcurement prcess, visit the CDE Prcurement Web page at Fr further guidance n cntracting with an FSMC, yu may als dwnlad the USDA Cntracting with FSMCs: Guidance fr SFAs frm the USDA Guidance and Resurces Web page at v/cnd/guidance/default.htm. Vended Meal Cntracts Neither state nr federal regulatins prvide a definitin f a meal vendr. Hwever, it is cmmnly understd that cmpanies prviding prepared meals t SFAs, and nthing mre, are meal vendrs. In this capacity, a meal vendr may als develp menus and menu prductin recrds, but wuld nt be cnsidered an FSMC. Hwever, additinal services (usually cnducted by the SFA) prvided by a cmpany, may cnstitute fd service management and must be bid fr and prcured as such. Meal vendrs may nt have access t individual student meal eligibility, may nt cllect meal payments, cnduct POS meal cunts, prvide prgram versight, cllect claim data, r act as an emplyee f r agent fr the SFA. Bid Prcess fr Vended Meal Cntracts SFAs cntracting fr vended meals (preparatin and delivery nly) shall prepare a written IFB and prvide it t as many ptential bidders as pssible. The gal f an IFB is t btain a minimum f three price qutes. SFAs may nt bypass the cmpetitive bidding prcess by entering int a cntract as a result f discussins with nly ne vendr. At this time, SFAs cntracting fr vended meals d nt need t submit bid dcuments t the CDE fr prir apprval; hwever, they must annually submit a signed cpy f the cntract and cntract extensins. SFAs must retain sufficient recrds detailing the significant histry f the prcurement, as utlined in 7 CFR, Part 200, Sectin SNP Online Training Page 23

24 SFAs shall make all bid dcuments available fr review, upn request, t the CDE, the USDA, and the federal Office f Inspectr General. The CDE retains the right t request any SFA t submit bid dcuments fr prir apprval (7 CFR, sectins [c][1], a[c][1], and [c][1]). Meal vendrs may nt: Access individual student meal eligibility Act as an emplyee f, r agent fr, the SFA Cllect claim data Cllect meal payments Cnduct pint f service meal cunts Prvide prgram versight Gegraphic Preferences The Natinal Schl Lunch Act (NSLA) allws SFAs receiving funds thrugh the CNPs t apply a gegraphic preference when prcuring unprcessed, lcally grwn, r lcally raised agricultural prducts. The gegraphic preference rule des nt apply t any prducts that have been cked, heated, canned r that have any additives r fillers. It can be applied t a wide array f prducts that meet the definitin f unprcessed r minimally prcessed, such as varius frms f fruits, vegetables, meats, fish, pultry, dairy, eggs, and grains. (NSLA, 42 United States Cde, Sectin 1758[j]) While this statute permits SFAs t apply a gegraphic preference t the maximum extent feasible and apprpriate, it des nt require them t purchase lcally grwn and lcally raised agricultural prducts r t apply a gegraphic preference in their prcurements f these prducts. The SFA respnsible fr the prcurement has discretin t determine whether and hw a gegraphic preference meets its needs (e.g., state, cunty regin, etc.). New standards fr fd preservatin techniques that are nw acceptable fr gegraphic preference include: Cling, refrigerating, and freezing Peeling, slicing, dicing, cutting, chpping, shucking, and grinding Drying and dehydrating Washing High water pressure washing r cld pasteurizing Packaging (i.e., eggs in cartns), vacuum packing, and bagging Butchering livestck, fish, and pultry Pasteurizing milk SNP Online Training Page 24