ATTENTION:  CO-OP DIRECTORS; ELEMENTARY PRINCIPALS; HIGH SCHOOL PRINCIPALS; MIDDLE SCHOOL PRINCIPALS; SECONDARY PRINCIPALS; CHILD NUTRITION DIRECTORS

The purpose of this memo is to provide guidance on the provision required in 7 CFR 210.14 (f) that states Child Nutrition Program regulations require all revenue from the sale of non-program foods to accrue to the nonprofit school food service account. 

Non-program food is defined as food sold in a school at any time or location on the school campus (other than reimbursable meals) purchased using funds from the non-profit school food service account.  Please note that this is different from competitive food, which is defined as all food (other than reimbursable meals) sold to students during the school day. 

Due to regulatory changes required by Section 206 of the Healthy, Hunger-Free Kids Act, all revenue from the sale of non-program foods sold in schools at any time or location on the school campus must accrue only to the school food service account and is no longer allowed to benefit student organizations or school programs. 

Purchasing Goods for School Groups

School food service may purchase goods for other entities officially sanctioned by the school through existing food service contracts, as long as the purchase cost is paid in full by the other entity, including any labor costs associated with purchasing these goods.  The additional purchase also must not create a material change in the school food authority’s (SFA) contracts. 

Example:  School food service purchases grocery items for consumer and family science class on preparing yeast breads.  The school food service must be reimbursed the full cost of the grocery items and any labor involve with the purchasing, ordering, receiving, storing, distribution to the classroom, etc. 

Utilizing School Food Service Labor for School Groups

In arrangements where the school food service labor is used to prepare goods for an outside entity (e.g., catering), the school food service must ensure that all costs, including labor and any other costs incurred, are covered by the entity which is being served by the school food service operations.  Since estimating these costs may be difficult, school food service should be cautious that food service funds are not lost when entering into these types of arrangements.  SFAs are reminded that hourly labor costs include the hourly rate plus any matching the district pays.  Before quoting a labor cost, child nutrition directors should consult with the district bookkeeper for the total labor cost per hour.  When entering into arrangements with outside entities, the school food service is best served having an agreement in place regarding costs and all other terms and conditions, including a stipulation that all risk relating to revenue losses must be covered by the outside entity and not the school food service. 

Example 1:  A sports team wishing to offer a concession stand fundraiser during a sporting event.  The sports team could pay the school food service for the full cost of food purchased through an existing food service contract and any labor (including fringe and overtime if applicable) it incurs in ordering the extra food (and any other role the school food service may play, e.g., preparing food).  The sports team can then sell the food at the sporting event and keep any revenue from those sales. 

Example 2:  JR drama class wishing to hold a spaghetti dinner fundraiser before or during the play presentation.  The drama class must pay the school food service for the full cost of food purchased through an existing food service contract and any labor (including fringe and overtime if applicable) it incurs in ordering the extra food (and any other role the school food service may play, e.g., preparing food).  The drama class can then sell the food at the play and keep any revenue from those sales.

Reminders

Again, this memo applies ONLY to foods purchased from the non-profit food service account and used outside the reimbursable meal program, inside the cafeteria (a la carte), and outside the cafeteria for fundraising projects such as the examples provided or school food service operated vending.

In addition, schools are reminded that USDA and Arkansas have restrictions on when, where and what can be sold outside the reimbursable meals program.  See the ADE Commissioner’s Memos for more information:  CNU-16-044: Smart Snacks in Arkansas Schools: Providing, Selling, and “9 Special Event Days.”

SFAs are strongly discouraged from allowing any school employee to purchase foods through the school food service contracts.