[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR240.7]

[Page 257-258]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 240--CASH IN LIEU OF DONATED FOODS--Table of Contents
 
Sec. 240.7  Payments to States.

    (a) Funds to be paid to any State agency under Sec. 240.3 of this 
part for disbursement to program schools shall be made available by 
means of United States Treasury Department checks. The State agency 
shall use the funds received without delay for the purpose for which 
issued.
    (b) Funds to be paid to any State agency under Sec. 240.4(a) for 
disbursement to nonresidential child care institutions and funds to be 
paid to any State agency under Sec. 240.6 for disbursement to program 
schools, service institutions, or nonresidential child care institutions 
shall be made available by means of Letters of Credit issued by FNS in 
favor of the State agency. The State agency shall:
    (1) Obtain funds needed to pay school food authorities, 
nonresidential child care institutions, and service institutions, as 
applicable through presentation by designated State Officials of a 
Payment Voucher on Letter of Credit (Treasury Form GFO 7578) in 
accordance with procedures prescribed by FNS and approved by the United 
States Treasury Department;
    (2) Submit requests for funds on a monthly basis in such amounts as 
necessary to make payments with respect to meals served the previous 
month;
    (3) Use the funds received without delay for the purpose for which 
drawn.
    (c) FNS shall make any cash payments elected under Sec. 240.5 of 
this part by increasing the amount of the Letter of Credit or, where 
applicable, of the Federal Treasury check, in accordance with the 
information provided under Sec. 240.5(c) of this part.

[[Page 258]]

    (d) Funds received by State agencies pursuant to this part for 
disbursement to program schools and to commodity schools shall not be 
subject to the matching provisions of Sec. 210.6 of part 210 of this 
chapter.