The purpose of the memo is to provide information to school
food authorities/local education agencies (SFA/LEA) regarding the option to
participate in the United States Department of Agriculture (USDA) Special
Assistance Alternative called Provision 2.
This provision allows school districts to serve reimbursable school
meals at no charge to all students.
Provision 2 Alternative:
This is a four (4) year cycle with the first year considered
the “base year” and the following three (3) years considered “non-base years”.
For the entire four (4) year Provision 2 cycle, NO changes
can be made in student populations or facilities that will impact/change economic
distribution of the students established in the "base year”.
Before applying for Provision 2 Alternative, carefully
review the USDA
Guidance for Provision 2.
Districts must have prior approval from the Division of
Elementary and Secondary Education (DESE), Child Nutrition Unit (CNU) prior to
beginning Provision 2.
There is no requirement that a minimum percentage of
children enrolled are eligible for free or reduced price meals. However, the school
must be prepared to pay the difference between Federal reimbursement and the
cost of providing all meals at no charge from sources other than Federal funds.
During the base year, student eligibility status is
determined in the same manner as regular pricing schools (Free and Reduced Meal
Applications, Direct Certification, Categorically eligible).
During the base year:
• A public notification is required to inform the public
and student households that during the "base year" all students in
the Provision 2 schools/district will eat at no charge regardless of whether
the meal applications are returned for approval or denied.
• Free and Reduced Meal Applications are distributed and
approved by eligibility category (Free 01, Reduced 02, and Paid 03) and coded
in eSchool and the Point of Service System (POS) by eligibility category.
• Districts must access the Direct Certification Portal and
code all enrolled students listed as an “Exact Match” as 04.
• Meals are served and counted at the point of service by
• All students are provided meals (breakfast and lunch) at
no charge to the household;
• Meals are claimed/reimbursed using Free, Reduced, and
Paid rates based on the actual meal participation.
• Districts will conduct the verification of eligibility
process on approved applications.
• District must retain specified base year records for the
entire period that the school operates under Provision 2 (base year plus all
extensions), plus five(5) years, or longer if there are audit findings and
until resolution of the findings.
During the non-base years (years after the base year), no
new student eligibility determinations are made using household meal
applications. The district is required to access the Direct Certification
Portal and code students appearing as an “Exact Match” as 04 in eSchool and the
POS. All other students are coded as
Counting and Claiming:
Claiming percentages are determined during the base year
based on participation. Those
percentages are applied in the three (3) non-base years following
implementation. The district will receive a separate Free, Reduced and Paid
claiming percentage for breakfast and lunch.
Meal counts are taken at the point of service and claiming
percentages are applied to aggregate counts to determine the meals claimed/reimbursed.
Federal reimbursement is determined by multiplying the per meal claim rate and
the total number of meals served each month by each claiming percentage.
Financial internal controls must be in place to prevent an
over-claim or under-claim payment and to substantiate meal counts. School
districts that have internal control findings through legislative audit or
administrative review may not be allowed to use the Provision 2 alternative.
Districts may apply for one (1) four (4) year extension
utilizing the same claiming percentages if the economic conditions of the area
have not changed. If economic conditions worsen, the district may choose to
establish a new base year, move to another provision, or return to standard
claiming by taking applications. The district does not have to wait until the
end of the four year cycle to make that change. Districts may apply for
additional four (4) year cycle extensions if conditions have not changed.
Since no student payments can be collected from the paid or
reduced students in Provision 2 schools, there will be a revenue reduction to
the district child nutrition program.
If reimbursements and/or other program income are not
sufficient to cover total nonprofit school food service program costs, the LEA must
pay, with funds from non-Federal sources, the difference between the cost of
serving lunches and/or breakfasts at no charge to all participating children
and the Federal reimbursement (7 CFR 245.9(b)(2)).
To receive Provision 2 information, please provide a
written request for information to Donna Ratliff at firstname.lastname@example.org