Nonprogram Foods Definition and Regulation
Participants will define nonprogram foods, list examples, and state regulations governing their sale. Nonprogram foods are purchased with NSFSA funds and include a la carte items, adult meals, fundraiser items, vending machine products, and catering purchases. Regulations require revenue from nonprogram foods to accrue to the NSFSA without subsidizing reimbursable meals.
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Nonprogram Foods Begin Course Click Arrow to Begin Home Button Home Button Home Button Found on each page. Selecting the Found on each page. Selecting the Found on each page. Selecting the Home Button Found on each page. Selecting the Home button returns you to this page. Home button returns you to this page. Home button returns you to this page. Home button returns you to this page. Shortcut Buttons These buttons link to major sections of this course. Double-Click to navigate. H Topic 2 Topic 3 Topic 4 Topic 1 Activity Topic 2 Topic 3 Topic 4 Topic 1 Activity
N NAVIGATION AVIGATION School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods Navigation is pretty basic. Back Button, Forward Button, and Home Button. Forward Button Back Button Found on each page. Selecting the Back button returns you to the previous page. Found on each page. Selecting the Forward button advances you to the next page. Home Button Found on each page. Selecting the H H H H H H H H Home button returns you to the very beginning page. H H H H
TOPIC 1 | NONPROGRAM FOODS DEFINITIONAND REGULATION Participants will: Define nonprogram foods and list examples. State the regulations governing the sale of nonprogram foods. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Nonprogram Foods Definition Nonprogram foods are foods and beverages purchased with funds from the Nonprofit School Food Service Account (NSFSA), then sold in participating schools other than reimbursable meals. Nonprogram foods may include but are not limited to: A la carte items Adult meals Items purchased for fundraisers, vending machines, and school stores Items purchased for catering Nonprogram Foods Regulation In 2010, an amendment to the Richard B. Russell National School Lunch Act established requirements related to the revenue from the sale of nonprogram foods. All School Food Authorities (SFAs) must comply with the following: All revenue from the sale of nonprogram foods accrues to the nonprofit school food service account; Revenue available to support the production of reimbursable school meals does not subsidize the sale of nonprogram foods. Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods H H H H H H H H H H H H Continued on next slide. 3
TOPIC 1 | NONPROGRAM FOODS DEFINITIONAND REGULATION Nonprogram Foods Regulation (continued) SFAs must be able to show that the proportion of total revenue generated from the sale of nonprogram foods to the total revenue of the NSFSA is equal to or greater than the proportion of total food costs in purchasing nonprogram foods to the total costs associated with obtaining program and nonprogram foods. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods For example, if the cost of nonprogram foods is 25% of the SFA s total food costs, the amount of revenue generated from the sale of nonprogram foods must be at least 25% of the total revenue in the NSFSA. H H H H H H H H H H H H Continued on next slide. 4
TOPIC 1 | NONPROGRAM FOODS DEFINITIONAND REGULATION Nonprogram Foods Regulation (continued) The SFA is in compliance because the 25 percent revenue is greater than the 20 percent food cost. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods H H H H H H H H H H H H 5
TOPIC 2 | NONPROGRAM FOODS WAIVER Participants will: Identify the nonprogram foods waiver requirements. Describe the components of a nonprogram foods policy. Describe nonprogram food markup procedures. Describe the calculation on how to price adult meals. List the required components of a nonprogram foods price list. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods Nonprogram Foods Waiver Background and Requirements The Pennsylvania Department of Education, Division of Food and Nutrition (DFN) recognized that the process for determining compliance with the revenue from nonprogram food requirement is very cumbersome. DFN requested a waiver from the United States Department of Agriculture (USDA) to allow SFAs to ensure compliance with these requirements in a less cumbersome way. In 2019 USDA granted a waiver for DFN to evaluate each SFA s nonprogram foods revenues and expenses with an alternative method. This waiver was granted through the 2023- 2024 school year. Nonprogram food requirements and the waiver requirements apply to all SFAs that are serving nonprogram foods. This includes non-pricing SFAs such as Residential Child Care Institutions (RCCI), SFAs participating in the Community Eligibility Program (CEP), and SFAs that have chosen not to charge their students for any meals. H H H H H H H H H H H H Continued on next slide. 6
TOPIC 2 | NONPROGRAM FOODS WAIVER Nonprogram Foods Waiver Background and Requirements (continued) Examples: 1. RCCI provides all reimbursable meals to students free of charge. However, staff can purchase meals. Therefore, the nonprogram foods for this SFA would be adult meals. 2. A school district is participating in CEP, so all students are receiving reimbursable meals free of charge. However, students may purchase second meals and a la carte items, adults may purchase meals, and the SFA provides catering services. The a la carte items, second meals, adult meals, and catering are all nonprogram foods. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods The Nonprogram Food Waiver includes two components: 1. Nonprogram Foods Policy 2. Nonprogram Foods Price List Note: A Sample Nonprogram Foods Policy and a Sample Nonprogram Foods Price List can be found on PEARS under Application > Download Forms > Paid Lunch Equity/Nonprogram Foods. H H H H H H H H H H H H Continued on next slide. 7
TOPIC 2 | NONPROGRAM FOODS WAIVER Nonprogram Foods Waiver Background and Requirements (continued) 1. Nonprogram Foods Policy SFAs selling nonprogram foods are required to create and implement a Nonprogram Foods Policy. The policy must: be inclusive of all nonprogram foods sold, and provide pricing procedures to explain how nonprogram food items are priced DFN does not require that this policy be school board-approved. However, there may be local requirements to have the policy approved. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods Developing a Nonprogram Foods Policy: SFA s must ensure: All revenues from the sale of nonprogram foods purchased with NSFSA funds must accrue to the NSFSA. Revenue available to support the production of reimbursable school meals does not subsidize the sale of nonprogram foods. A. Define nonprogram foods and identify all types of nonprogram foods sold at the SFA. The policy must describe nonprogram food markup procedures for each type of nonprogram foods sold. Type of nonprogram foods include: A la carte extra milk, water, juice, second entrees, Smart Snacks, etc. Non-reimbursable meals second meals, incomplete meals, and suppers Fundraisers and concession stands Clubs purchasing items from the Food Service department for their own profit Vending machines and School stores Items purchased with funds from the NSFSA Catering Internal and External H H H H H H H H H H H H Continued on next slide. 8
TOPIC 2 | NONPROGRAM FOODS WAIVER Nonprogram Foods Waiver Background and Requirements 1. Nonprogram Foods Policy A. Define nonprogram foods and identify all types of nonprogram foods sold at the SFA. The policy must describe nonprogram food markup procedures for each type of nonprogram foods sold. Type of nonprogram foods include (continued): Internal catering is a service provided to organizations within the SFA (e.g. PTO, Superintendent s Office, Athletic Director s Office, clubs within the SFA, snacks and drinks for classrooms, crackers for the nurse s office). School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods Example: PTO purchases drinks and snacks from the Food Service department to sell during a school dance. The PTO reimburses the Food Service department for all costs associated with the foods purchased. The PTO can then sell the drinks and snacks to students, staff, volunteers, etc. during the school dance. The PTO may keep any profits earned from the sales of these items. External catering is a service provided to for-profit or not-for-profit organizations outside of the SFA. Example: A Boy Scout Troop purchases 97 meals for a banquet from the Food Service department. The Boy Scout Troop reimburses the Food Service department for all costs associated with the food purchases. The Boy Scout Troop may choose to absorb the meal costs or recoup part or all of the costs from the scouts parents. H H H H H H H H H H H H Continued on next slide. 9
TOPIC 2 | NONPROGRAM FOODS WAIVER Nonprogram Foods Waiver Background and Requirements 1. Nonprogram Foods Policy A. Define nonprogram foods and identify all types of nonprogram foods sold at the SFA. The policy must describe nonprogram food markup procedures for each type of nonprogram foods sold. Type of nonprogram foods include (continued): Additional notes about catering: If the SFA is providing catering services for a for-profit organization, they are required to collect sales tax. USDA Foods may not be used for special functions or catering events unless the SFA s students will be the primary beneficiaries. If the SFA is providing catering services or special functions services, the NSFSA must be reimbursed for all costs associated with the purchase, including labor and food costs. Food services may purchase goods for entities officially sanctioned by the school through an existing Food Service Management Company (FSMC) contract. The NSFSA must be reimbursed for all associated costs. Catering purchases must not create a material change in the SFA s contract with the FSMC. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods B. Describe nonprogram foods mark-up procedures. The nonprogram food policy must explain the markup that is used to determine the selling price of all nonprogram foods. SFAs should set nonprogram food markups to gain as much revenue as possible but should also consider what the local market will accept. The SFA should also consider a lower markup for healthier options. Various methods used to markup nonprogram foods include: a. Determining a markup percentage (e.g. The price markup on the nonprogram foods will be set at a minimum of XX%.) b. Determining a range of markup percentages (e.g. The price markup on the nonprogram foods will range from XX% to XX%.) H H H H H H H H H H H H Continued on next slide. 10
TOPIC 2 | NONPROGRAM FOODS WAIVER 1. Nonprogram Foods Policy (continued) B. Describe nonprogram foods mark-up procedures Various methods used to markup nonprogram foods include (continued): c. Determine a flat markup (e.g. The price markup on nonprogram foods will be set at a flat rate minimum of $.XX.) d. Use a combination of a markup percentage and flat rate (e.g. The price markup on nonprogram foods will be set at a minimum of XX% but may be adjusted up or down to the nearest $.XX increment.) School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods C. Adult Meals Price Calculation USDA has provided guidance explaining how adult meal prices must be determined. Annually, PDE issues the PDE Adult Meal Price Memo which outlines the minimum adult meal price calculation for pricing and non-pricing SFAs for both breakfast and lunch for the upcoming school year. While these calculations yield the minimum amounts that must be charged for adult meals, the SFA is permitted to charge a higher amount. It is recommended that this memo be reviewed annually to ensure compliance with requirements for adult meal pricing. This memo can be found in PEARS under Application > Download Forms > Paid Lunch Equity/Nonprogram Foods. Adult Meal Prices Calculator H H H H H H H H H H H H Continued on next slide. 11
TOPIC 2 | NONPROGRAM FOODS WAIVER 1. Nonprogram Foods Policy (continued) Determining Adult Meal Prices for Pricing SFAs NOTE: Rates listed in the below examples are for the 2020-2021 school year. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Breakfast: the highest value that students pay, plus the State reimbursement ($0.10), plus the lowest Federal reimbursement for a paid breakfast meal ($0.31). Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods Example: $1.80 (highest student breakfast price) $0.10 (State reimbursement) $0.31 (Federal reimbursement) $2.21 (Minimum Adult Breakfast Price) Lunch: the highest value that students pay, plus the State reimbursement ($0.10), plus the lowest Federal reimbursement for a paid lunch meal ($0.32), plus the commodity rate ($0.2375). Example: $2.90 (highest student lunch price) $0.10 (State reimbursement) $0.32 (Federal reimbursement) $0.2375(commodity rate) $3.5575 rounded to $3.56 (Minimum Adult Lunch Price) H H H H H H H H H H H H Continued on next slide. 12
TOPIC 2 | NONPROGRAM FOODS WAIVER 1. Nonprogram Foods Policy (continued) Determining Adult Meal Prices for Non-Pricing SFAs NOTE: Rates listed in the below examples are for the 2020-2021 school year. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Breakfast: State reimbursement ($0.10) plus the Federal reimbursement for a free breakfast meal ($1.84). Marketing School Meals Put Course Name Here Put Course Name Here Example: $0.10 (State reimbursement) $1.84 (Federal reimbursement) Nonprogram Foods $1.94 (Minimum Adult Breakfast Price) Lunch: State reimbursement ($0.10), plus the Federal reimbursement for a free lunch meal ($3.41), plus the commodity rate ($0.2375). Example: $0.10 (State reimbursement) $3.41 (Federal reimbursement) $0.2375 (commodity rate) $3.7474 rounded to $3.75 (Minimum Adult Lunch Price) H H H H H H H H H H H H 13
TOPIC 2 | NONPROGRAM FOODS WAIVER 2. Nonprogram Foods Price List The final part of the Nonprogram Food Waiver is a price list of all nonprogram foods sold. This price list must include, but is not limited to, all nonprogram foods sold, the unit price, the selling price, and the markup. A sample Nonprogram Foods Price List: School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods H H H H H H H H H H H H 14
TOPIC 3 | NONPROGRAM FOODS DURING AN ADMINISTRATIVE REVIEW Participants will: Participants will list the nonprogram foods documentation required during an Administrative Review. Participants will describe the actions that must be taken by an SFA that fails to provide the required documentation during an Administrative Review. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here During an Administrative Review, all SFAs selling nonprogram foods are asked to submit a copy of the following: Nonprogram food pricing policy Nonprogram food price list Point of Service Report for one day. If adult meals are sold then the report must include the sale of adult meals. One catering invoice (if applicable) Attestation Statement. The SFA must attest that all nonprogram foods are sold at or above cost. It is highly recommended that this statement be included in the Pricing Policy. If the SFA does not provide the documentation for the Nonprogram Food Waiver, the SFA will be required to complete and submit the USDA Nonprogram Food Revenue Tool and provide the documentation to support all of the figures in the USDA Nonprogram Food Revenue Tool. Nonprogram Foods H H H H H H H H H H H H 15
TOPIC 4 | NONPROGRAM FOOD REFERENCES The following documents can be found in PEARS under Application > Download Forms > Paid Lunch Equity/Nonprogram Foods, or you may download them below: Nonprogram food pricing policy School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here FNS Instruction 782-5 Rev. 1 Nonprogram Foods PDE Adult Meals Price Memo Sample Nonprogram Foods Policy Sample Nonprogram Foods Price List H H H H H H H H H H H H 16
I IDENTIFY DENTIFYTHE THE N NONPROGRAM ONPROGRAM F FOODS OODS This exercise requires that the device you are viewing this presentation on is connected to the internet. Instructions: Identify which items are "Nonprogram Foods" by using your mouse to click and drag a "Yes" or "No" badge down to each one of the seven scenarios below. School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox School Nutrition Toolbox Marketing School Meals Put Course Name Here Put Course Name Here Nonprogram Foods When you have finished labeling each of the seven items "Yes or No," click on the "Check Your Answers" button to reveal your score. In reviewing your answers, correct responses will have a "small green check mark" at the bottom right. Incorrect responses will have a "small red X" at the bottom right. Launch Online Activity Launch Online Activity H H H H H H H H H H H H 17
School Nutrition Toolbox Nonprogram Foods H H H H H H 18
