[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR210.7]

[Page 14-16]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 210_NATIONAL SCHOOL LUNCH PROGRAM--Table of Contents
 
 Subpart B_Reimbursement Process for States and School Food Authorities
 
Sec.  210.7  Reimbursement for school food authorities.

    (a) General. Reimbursement payments to finance nonprofit school food 
service operations shall be made only to school food authorities 
operating under a written agreement with the State agency. Subject to 
the provisions of Sec.  210.8(c), such payments may be made for lunches 
and meal supplements served in accordance with provisions of this part 
and part 245 in the calendar month preceding the calendar

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month in which the agreement is executed. These reimbursement payments 
include general cash assistance for all lunches served to children under 
the National School Lunch Program and special cash assistance payments 
for free or reduced price lunches served to children determined eligible 
for such benefits under the National School Lunch and Commodity School 
Programs. Reimbursement payments shall also be made for meal supplements 
served to eligible children in afterschool care programs in accordance 
with the rates established in Sec.  210.4(b)(3). Approval shall be in 
accordance with part 245 of this chapter.
    (b) Assignment of rates. At the beginning of each school year, State 
agencies shall establish the per meal rates of reimbursement for school 
food authorities participating in the Program. These rates of 
reimbursement may be assigned at levels based on financial need; except 
that, the rates are not to exceed the maximum rates of reimbursement 
established by the Secretary under Sec.  210.4(b) and are to permit 
reimbursement for the total number of lunches in the State from funds 
available under Sec.  210.4. Within each school food authority, the 
State agency shall assign the same rate of reimbursement from general 
cash assistance funds for all lunches served to children under the 
Program. Assigned rates of reimbursement may be changed at any time by 
the State agency, provided that notice of any change is given to the 
school food authority. The total general and special cash assistance 
reimbursement paid to any school food authority for lunches served to 
children during the school year are not to exceed the sum of the 
products obtained by multiplying the total reported number of lunches, 
by type, served to eligible children during the school year by the 
applicable maximum per lunch reimbursements prescribed for the school 
year for each type of lunch.
    (c) Reimbursement limitations. To be entitled to reimbursement under 
this part, each school food authority shall ensure that Claims for 
Reimbursement are limited to the number of free, reduced price and paid 
lunches and meal supplements that are served to children eligible for 
free, reduced price and paid lunches and meal supplements, respectively, 
for each day of operation.
    (1) Lunch count system. To ensure that the Claim for Reimbursement 
accurately reflects the number of lunches and meal supplements served to 
eligible children, the school food authority shall, at a minimum:
    (i) Correctly approve each child's eligibility for free and reduced 
price lunches and meal supplements based on the requirements prescribed 
under 7 CFR part 245;
    (ii) Maintain a system to issue benefits and to update the 
eligibility of children approved for free or reduced price lunches and 
meal supplements. The system shall:
    (A) Accurately reflect eligibility status as well as changes in 
eligibility made after the initial approval process due to verification 
findings, transfers, reported changes in income or household size, etc.; 
and
    (B) Make the appropriate changes in eligibility after the initial 
approval process on a timely basis so that the mechanism the school food 
authority uses to identify currently eligible children provides a 
current and accurate representation of eligible children. Changes in 
eligibility which result in increased benefit levels shall be made as 
soon as possible but no later than 3 operating days of the date the 
school food authority makes the final decision on a child's eligibility 
status. Changes in eligibility which result in decreased benefit levels 
shall be made as soon as possible but no later than 10 operating days of 
the date the school food authority makes the final decision on the 
child's eligibility status.
    (iii) Base Claims for Reimbursement on lunch counts, taken daily at 
the point of service, which correctly identify the number of free, 
reduced price and paid lunches served to eligible children;
    (iv) Correctly record, consolidate and report those lunch and 
supplement counts on the Claim for Reimbursement; and
    (v) Ensure that Claims for Reimbursement do not request payment for 
any excess lunches produced, as prohibited in Sec.  210.10(a)(2), or 
non-Program lunches (i.e., a la carte or adult

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lunches) or for more than one meal supplement per child per day.
    (2) Point of service alternatives.
    (i) State agencies may authorize alternatives to the point of 
service lunch counts provided that such alternatives result in accurate, 
reliable counts of the number of free, reduced price and paid lunches 
served, respectively, for each serving day. State agencies are 
encouraged to issue guidance which clearly identifies acceptable point 
of service alternatives and instructions for proper implementation. 
School food authorities may select one of the State agency approved 
alternatives without prior approval.
    (ii) In addition, on a case-by-case basis, State agencies may 
authorize school food authorities to use other alternatives to the point 
of service lunch count; provided that such alternatives result in an 
accurate and reliable lunch count system. Any request to use an 
alternative lunch counting method which has not been previously 
authorized under paragraph (2)(i) is to be submitted in writing to the 
State agency for approval. Such request shall provide detail sufficient 
for the State agency to assess whether the proposed alternative would 
provide an accurate and reliable count of the number of lunches, by 
type, served each day to eligible children. The details of each approved 
alternative shall be maintained on file at the State agency for review 
by FNS.
    (d) The State agency shall reimburse the school food authority for 
meal supplements served in eligible schools (as defined in Sec.  
210.10(n)(1)) operating afterschool care programs under the NSLP in 
accordance with the rates established in Sec.  210.4(b).

[53 FR 29147, Aug. 2, 1988, as amended at 54 FR 12581, Mar. 28, 1989; 56 
FR 32939, July 17, 1991; 58 FR 42487, Aug. 10, 1993; 60 FR 31207, June 
13, 1995; 65 FR 26912, May 9, 2000]