[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR225.15]

[Page 144-150]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 225--SUMMER FOOD SERVICE PROGRAM--Table of Contents
 
                 Subpart C--Sponsor and Site Provisions
 
Sec. 225.15  Management responsibilities of sponsors.

    (a) General. (1) Sponsors shall operate the food service in 
accordance with: the provisions of this part; any instructions and 
handbooks issued by FNS under this part; and any instructions and 
handbooks issued by the State agency which are not inconsistent with the 
provisions of this part.
    (2) Sponsors shall not claim reimbursement under parts 210, 215, 
220, or 226 of this chapter. In addition, the sponsor must ensure that 
records of any site serving homeless children accurately reflect 
commodity allotments received as a ``charitable institution'', as 
defined in Secs. 250.3 and 250.41 of this chapter. Commodities received 
for Program meals must be based only on the number of eligible 
children's meals served. Sponsors may use funds from other Federally-
funded programs to supplement their meal service but must, in 
calculating their claim for reimbursement, deduct such funds from total 
operating and administrative costs in accordance with the definition of 
``income accruing to the Program'' at Sec. 225.2 and with the 
regulations at Sec. 225.9(d). Sponsors which are school food authorities 
may use facilities, equipment and personnel supported by funds provided 
under this part to support a nonprofit nutrition program for the 
elderly, including a program funded under the Older Americans Act of 
1965 (42 U.S.C. 3001 et seq.).
    (3) No sponsor may contract out for the management responsibilities 
of the Program described in this section.
    (b) Meal Ordering. (1) Each sponsor shall, to the maximum extent 
feasible, utilize either its own food service facilities or obtain meals 
from a school food service facility. If the sponsor obtains meals from a 
school food service facility, the applicable requirements of this part 
shall be embodied in a written agreement between the sponsor and the 
school.
    (2) Upon approval of its application or any adjustment in the 
approved levels of meal service for its sites established under 
Sec. 225.6(d)(2), vended sponsors shall inform their food service 
management company of the approved level at each site for which the food 
service management company will provide meals.
    (3) Sponsors shall plan for and prepare or order meals on the basis 
of participation trends with the objective of providing only one meal 
per child at each meal service. The sponsor shall make the adjustments 
necessary to achieve this objective using the results from its 
monitoring of sites. For sites for which approved levels of meal service 
have been established in accordance with Sec. 225.6(d)(2), the sponsor 
shall adjust the number of meals ordered or prepared with the objective 
of providing only one meal per child whenever the number of children 
attending the site is below the approved level. The sponsor shall not 
order or prepare meals for children at any site in excess

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of the site's approved level, but may order or prepare meals above the 
approved level if the meals are to be served to adults performing 
necessary food service labor in accordance with Sec. 225.9(d)(4). 
Records of participation and of preparation or ordering of meals shall 
be maintained to demonstrate positive action toward meeting this 
objective.
    (4) In recognition of the fluctuation in participation levels which 
makes it difficult to estimate precisely the number of meals needed and 
to reduce the resultant waste, sponsors may claim reimbursement for a 
number of second meals which does not exceed two percent of the number 
of first meals served to children for each meal type (i.e., breakfasts, 
lunches, supplements, or suppers) during the claiming period. The State 
agency shall disallow all claims for second meals if it determines that 
the sponsor failed to plan and prepare or order meals with the objective 
of providing only one meal per child at each meal service. Second meals 
shall be served only after all participating children at the site's meal 
service have been served a meal.
    (c) Records and claims. (1) Sponsors shall maintain accurate records 
which justify all costs and meals claimed. Failure to maintain such 
records may be grounds for denial of reimbursement for meals served and/
or administrative costs claimed during the period covered by the records 
in question. The sponsor's records shall be available at all times for 
inspection and audit by representatives of the Secretary, the 
Comptroller General of the United States, and the State agency for a 
period of three years following the date of submission of the final 
claim for reimbursement for the fiscal year.
    (2) Sponsors shall submit claims for reimbursement in accordance 
with this part. All final claims must be submitted to the State agency 
within 60 days following the last day of the month covered by the claim.
    (d) Training and monitoring. (1) Each sponsor shall hold Program 
training sessions for its administrative and site personnel and shall 
allow no site to operate until personnel have attended at least one of 
these training sessions. The State agency may waive these training 
requirements for operation of the Program during unanticipated school 
closures during the period from October through April (or at any time of 
the year in an area with a continuous school calendar). Training of site 
personnel shall, at a minimum, include: the purpose of the Program; site 
eligibility; recordkeeping; site operations; meal pattern requirements; 
and the duties of a monitor. Each sponsor shall ensure that its 
administrative personnel attend State agency training provided to 
sponsors, and sponsors shall provide training throughout the summer to 
ensure that administrative personnel are thoroughly knowledgeable in all 
required areas of Program administration and operation and are provided 
with sufficient information to enable them to carry out their Program 
responsibilities. Each site shall have present at each meal service at 
least one person who has received this training.
    (2) Sponsors shall visit each of their sites at least once during 
the first week of operation under the Program and shall promptly take 
such actions as are necessary to correct any deficiencies.
    (3) Sponsors shall review food service operations at each site at 
least once during the first four weeks of Program operations, and 
thereafter shall maintain a reasonable level of site monitoring. 
Sponsors shall complete a monitoring form developed by the State agency 
during the conduct of these reviews.
    (e) Media Release. Each sponsor shall annually announce in the media 
serving the area from which it draws its attendance the availability of 
free meals. Camps and other programs not eligible under Sec. 225.2 
(paragraph (a) of ``areas in which poor economic conditions exist'') 
shall annually announce to all participants the availability of free 
meals for eligible children. All media releases issued by camps and 
other programs not eligible under Sec. 225.2 (paragraph (a) of ``areas 
in which poor economic conditions exist'') shall include: the 
Secretary's family-size and income standards for reduced price school 
meals labelled ``SFSP Income Eligibility Standards''; a statement that 
children

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who are members of households receiving food stamp, FDPIR, or TANF 
benefits are automatically eligible to receive free meal benefits at 
eligible program sites; and a statement that meals are available without 
regard to race, color, national origin, sex, age, or handicap.
    (f) Application for free Program meals.--(1) Purpose of application 
form. The application is used to determine the eligibility of children 
attending camps and the eligibility of sites that are not open sites as 
defined in paragraph (a) of the definition of ``areas in which poor 
economic conditions exist'', in Sec. 225.2. In these situations, parents 
or guardians of children enrolled in camps or these other sites must be 
given application forms to provide information described in paragraph 
(f)(2) or (f)(3) of this section, as applicable. Applications are not 
necessary if other information sources are available and can be used to 
determine eligibility of individual children in camps or sites.
    (2) Application procedures based on household income. The household 
member completing the application on behalf of the child enrolled in the 
Program must provide the following information:
    (i) The names of all children for whom application is made;
    (ii) The names of all other household members;
    (iii) The social security number of the adult household member who 
signs the application or an indication that the household member does 
not have a social security number;
    (iv) The income received by each household member identified by 
source of income;
    (v) The signature of an adult household member;
    (vi) The date the application is completed and signed.
    (3) Application based on the household's receipt of food stamp, 
FDPIR, or TANF benefits. Households may apply on the basis of receipt of 
food stamp, FDPIR, or TANF benefits by providing the following 
information:
    (i) The name(s) and food stamp, FDPIR, or TANF case number(s) of the 
child(ren) who are enrolled in the Program; and
    (ii) The signature of an adult household member.
    (4) Information or notices required on application forms. 
Application forms or descriptive materials given to households about 
applying for free meals must contain the following information:
    (i) The family-size and income levels for reduced price school meal 
eligibility with an explanation that households with incomes less than 
or equal to these values are eligible for free Program meals (Note: The 
income levels for free school meal eligibility must not be included on 
the application or in other materials given to the household).
    (ii) A statement that a child who is a member of a household that 
receives food stamp, FDPIR, or TANF benefits is automatically eligible 
to receive free meals in the Program;
    (iii) A statement that reads, ``In certain cases, foster children 
are eligible for free meals regardless of household income. If such 
children are living with you and you wish to apply for such meals, 
please contact us.'';
    (iv) The following statement that provides notice to the household 
member whose social security number is disclosed: ``Unless you include 
your child's case number for the Food Stamp Program, the Food 
Distribution Program on Indian Reservations (or other identifier for the 
Food Distribution Program on Indian Reservations) or the Temporary 
Assistance for Needy Families Program, you must include the social 
security number of the adult household member signing the application or 
indicate that the household member does not have a social security 
number. This is required by section 9 of the National School Lunch Act. 
The social security number is not mandatory, but the application cannot 
be approved if a social security number is not given or an indication is 
not made that the signer does not have a social security number. The 
social security number will be used in the administration and 
enforcement of the program.''
    (v) The statement used to inform the household about the use of 
social security numbers must comply with the Privacy Act of 1974 (Pub. 
L. 93-579). If a State or local agency plans to use the

[[Page 147]]

social security numbers for uses not described in paragraph (f)(4)(iv) 
of this section, the notice must be revised to explain those uses.
    (vi) Examples of income that should be provided on the application, 
including: Earnings, wages, welfare benefits, pensions, support 
payments, unemployment compensation, social security, and other cash 
income;
    (vii) A notice placed immediately above the signature block stating 
that the person signing the application certifies that all information 
provided is correct, that the household is applying for Federal benefits 
in the form of free Program meals, that Program officials may verify the 
information on the application, and that purposely providing untrue or 
misleading statements may result in prosecution under State or Federal 
criminal laws; and
    (viii) A statement that if food stamp, FDPIR, or TANF case numbers 
are provided, they may be used to verify the current food stamp, FDPIR, 
or TANF certification for the children for whom free meals benefits are 
claimed.
    (5) Verifying information on Program applications. Households 
selected to verify information on their Program applications must be 
notified in writing. State agencies must ensure that the notice of 
information about the use of social security numbers provided on 
applications complies with section 7 of Pub. L. 93-579 (Privacy Act of 
1974). Households must be informed of the following:
    (i) They must provide a social security number for each adult 
household member, or indicate that an adult household member does not 
have a social security number, or provide proof that they are receiving 
food stamp, FDPIR, or TANF benefits;
    (ii) They will lose Program benefits or be terminated from 
participation if they do not cooperate with the verification process;
    (iii) Social security numbers may be used to determine the 
correctness of information on applications and continued eligibility for 
Program benefits;
    (iv) They will be given the name and phone number of an official who 
can assist in the verification process;
    (v) Verification may occur during program reviews, audits, and 
investigations;
    (vi) Verification may include contacting employers, food stamp or 
welfare offices, or State employment offices to determine the accuracy 
of statements on the application about income, receipt of food stamp, 
FDPIR, TANF, or unemployment benefits; and
    (vii) They may lose benefits or face claims or legal action if 
incorrect information is reported on the application.
    (g) Disclosure of program eligibility information to State Medicaid 
(Medicaid) and the State Children's Health Insurance Program (SCHIP). 
Program eligibility information about children eligible for free and 
reduced price meals may be disclosed to Medicaid and SCHIP as described 
in this section.
    (1) Who decides whether to disclose program eligibility information 
to Medicaid and/or SCHIP? The State agency may elect to allow sponsors 
to disclose children's free and reduced price meal eligibility 
information to Medicaid and SCHIP. Sponsors may then elect to do so. 
Children's program eligibility information may only be disclosed to 
Medicaid or SCHIP when both the State agency and the sponsor so elect, 
the parent/guardian does not decline to have their eligibility 
information disclosed as described in paragraph (g)(5), and the 
requirements in this paragraph (g) are met. y
    (2) What information may we disclose for use by Medicaid and SCHIP? 
The State agency or sponsor, as appropriate, may disclose children's 
names, eligibility status (whether they are eligible for free or reduced 
price meals), and any other eligibility information obtained through the 
free and reduced price meal application or obtained through direct 
certification to persons directly connected with the administration of 
Medicaid or SCHIP.
    (3) Who are persons ``directly connected'' with the administration 
of Medicaid and SCHIP? State employees and persons authorized under 
Federal and State Medicaid and SCHIP requirements to carry out initial 
processing of Medicaid or SCHIP applications or to make eligibility 
determinations are

[[Page 148]]

persons directly connected with the administration of Medicaid and SCHIP 
for purposes of disclosure of children's free and reduced price meal 
eligibility information.
    (4) What are the restrictions on how Medicaid and SCHIP use 
children's free and reduced price meal eligibility information? Medicaid 
and SCHIP agencies and health insurance program operators receiving 
children's free and reduced price meal eligibility information may only 
use the information to enroll children in Medicaid or SCHIP. The 
Medicaid and SCHIP enrollment process may include targeting and 
identifying children from low-income households who are potentially 
eligible for Medicaid or SCHIP for the purpose of seeking to enroll them 
in Medicaid or SCHIP.
    (5) What are the requirements for notifying households of potential 
disclosure to Medicaid or SCHIP? The State agency or sponsor, as 
appropriate, must notify parents/guardians that their children's free or 
reduced price meal eligibility information will be disclosed to Medicaid 
and/or SCHIP unless the parent/guardian elects not to have their 
information disclosed. Additionally, the State agency or sponsor, as 
appropriate, must give parents/guardians an opportunity to elect not to 
have their information disclosed to Medicaid or SCHIP. Only the parent 
or guardian who is a member of the household or family for purposes of 
the free and reduced price meal or free milk application may decline the 
disclosure of eligibility information. The notification must inform 
parents/guardians that they are not required to consent to the 
disclosure, that the information, if disclosed, will be used to identify 
children eligible for and seek to enroll children in a health insurance 
program, and that their decision will not affect their children's 
eligibility for free or reduced price meals. The notification may be 
included in the letter/notice to parents/guardians that accompanies the 
free and reduced price application, on the application itself or in a 
separate notice provided to parents/guardians. The notice must give 
parents/guardians adequate time to respond. For children determined 
eligible through direct certification, the notice of potential 
disclosure may be included in the document informing parents/guardians 
of their children's eligibility for free meals through direct 
certification.
    (6) May social security numbers be disclosed? The State agency or 
sponsor, as appropriate, may disclose social security numbers to any 
programs or persons authorized to receive all program eligibility 
information under this paragraph (g), provided parents/guardians have 
not declined to have their information disclosed. However, State 
agencies and sponsors that plan to disclose social security numbers must 
give notice of the planned use of the social security number. This 
notice must be in accordance with section 7(b) of the Privacy Act of 
1974 (5 U.S.C. 552a note). The application must include substantially 
the following language for disclosures of social security numbers to 
Medicaid or SCHIP: ``The social security number may also be disclosed to 
Medicaid and the State Children's Health Insurance Program for the 
purpose of identifying and seeking to enroll eligible children in one of 
these health insurance programs.'' This language is in addition to the 
notice required in paragraph (f)(4)(iv) of this section. State agencies 
and sponsors are responsible for drafting the appropriate notice for 
disclosures of social security numbers.
    (7) Are agreements required before disclosing program eligibility 
information? The State agency or sponsor, as appropriate, must have a 
written agreement with the State or local agency or agencies 
administering Medicaid or SCHIP prior to disclosing children's free and 
reduced price eligibility information. At a minimum, the agreement must:
    (i) Identify the health insurance program or health agency receiving 
children's eligibility information;
    (ii) Describe the information that will be disclosed;
    (iii) Require that the Medicaid or SCHIP agency use the information 
obtained and specify that the information must only be used to seek to 
enroll children in Medicaid or SCHIP;
    (iv) Describe how the information will be protected from 
unauthorized uses and disclosures;
    (v) Describe the penalties for unauthorized disclosure; and

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    (vi) Be signed by both the Medicaid or SCHIP program or agency and 
the State agency or sponsor, as appropriate.
    (8) What are the penalties for unauthorized disclosure or misuse of 
information? In accordance with section 9(b)(2)(C)(v) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any 
individual who publishes, divulges, discloses or makes known in any 
manner, or to any extent not authorized by statute or this section, any 
information obtained under this paragraph (g) will be fined not more 
than $1,000 or imprisoned for up to 1 year, or both.
    (9) What are the State agency's responsibilities regarding 
disclosures? State agencies that elect to allow disclosure of children's 
free and reduced price meal eligibility information to Medicaid or 
SCHIP, as provided in this paragraph (g), must ensure that any sponsor 
acting in accordance with that option:
    (i) Has a written agreement with the State or local agency or 
agencies administering health insurance programs for children under 
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq. 
and 1397aa et seq.) that requires the health agencies to use children's 
free and reduced price meal eligibility information to seek to enroll 
children in those health insurance programs; and
    (ii) Notifies each household of the information that will be 
disclosed, that the information disclosed will be used only to seek to 
enroll children in Medicaid or SCHIP and provides each parent/guardian 
with an opportunity to elect not to have the information disclosed.
    (h) Food service management companies. (1) Failure by a sponsor to 
comply with the provisions of this section shall be sufficient grounds 
for the State agency to terminate that sponsor's participation in 
accordance with Sec. 225.18.
    (2) Any sponsor may contract with a food service management company 
to manage the sponsor's food service operations and/or for the 
preparation of unitized meals with or without milk or juice. Exceptions 
to the unitizing requirement may only be made in accordance with the 
provisions set forth at Sec. 225.6(h)(3).
    (3) Any vended sponsor shall be responsible for ensuring that its 
food service operation is in conformity with its agreement with the 
State agency and with all the applicable provisions of this part.
    (4) In addition to any applicable State or local laws governing bid 
procedures, and with the exceptions identified in this paragraph, each 
sponsor which contracts with a food service management company shall 
comply with the competitive bid procedures described in this paragraph. 
Sponsors which are schools or school food authorities and which have an 
exclusive contract with a food service management company for year-round 
service, and sponsors whose total contracts with food service management 
companies will not exceed $10,000, shall not be required to comply with 
these procedures. These exceptions do not relieve the sponsor of the 
responsibility to ensure that competitive procurement procedures are 
followed in contracting with any food service management company. Each 
sponsor whose proposed contract is subject to the specific bid 
procedures set forth in this paragraph shall ensure, at a minimum, that:
    (i) All proposed contracts are publicly announced at least once, not 
less than 14 calendar days prior to the opening of bids, and the 
announcement includes the time and place of the bid opening;
    (ii) The bids are publicly opened;
    (iii) The State agency is notified, at least 14 calendar days prior 
to the opening of the bids, of the time and place of the bid opening;
    (iv) The invitation to bid does not specify a minimum price;
    (v) The invitation to bid contains a cycle menu approved by the 
State agency upon which the bid is based;
    (vi) The invitation to bid contains food specifications and meal 
quality standards approved by the State agency upon which the bid is 
based;
    (vii) The invitation to bid does not specify special meal 
requirements to meet ethnic or religious needs unless such special 
requirements are necessary to meet the needs of the children to be 
served;

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    (viii) Neither the invitation to bid nor the contract provides for 
loans or any other monetary benefit or term or condition to be made to 
sponsors by food service management companies;
    (ix) Nonfood items are excluded from the invitation to bid, except 
where such items are essential to the conduct of the food service;
    (x) Copies of all contracts between sponsors and food service 
management companies, along with a certification of independent price 
determination, are submitted to the State agency prior to the beginning 
of Program operations;
    (xi) Copies of all bids received are submitted to the State agency, 
along with the sponsor's reason for choosing the successful bidder; and
    (xii) All bids in an amount which exceeds the lowest bid and all 
bids totaling $100,000 or more are submitted to the State agency for 
approval before acceptance. State agencies shall respond to a request 
for approval of such bids within 5 working days of receipt.
    (5) Each food service management company which submits a bid over 
$100,000 shall obtain a bid bond in an amount not less than five (5) 
percent nor more than ten (10) percent, as determined by the sponsor, of 
the value of the contract for which the bid is made. A copy of the bid 
bond shall accompany each bid.
    (6) Each food service management company which enters into a food 
service contract for over $100,000 with a sponsor shall obtain a 
performance bond in an amount not less than ten (10) percent nor more 
than twenty-five (25) percent of the value of the contract, as 
determined by the State agency, of the value of the contract for which 
the bid is made. Any food service management company which enters into 
more than one contract with any one sponsor shall obtain a performance 
bond covering all contracts if the aggregate amount of the contracts 
exceeds $100,000. Sponsors shall require the food service management 
company to furnish a copy of the performance bond within ten days of the 
awarding of the contract.
    (7) Food service management companies shall obtain bid bonds and 
performance bonds only from surety companies listed in the current 
Department of the Treasury Circular 570. No sponsor or State agency 
shall allow food service management companies to post any 
``alternative'' forms of bid or performance bonds, including but not 
limited to cash, certified checks, letters of credit, or escrow 
accounts.
    (i) Other responsibilities. Sponsors shall comply with all of the 
meal service requirements set forth in Sec. 225.16.

[54 FR 18208, Apr. 27, 1989, as amended at 55 FR 13470, Apr. 10, 1990; 
61 FR 25553, May 22, 1996; 64 FR 72486, Dec. 28, 1999; 64 FR 72898, Dec. 
29, 1999; 65 FR 82251, Dec. 28, 2000; 66 FR 2202, Jan. 11, 2001]