[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR240.1]



[Page 278-279]

 

                          TITLE 7--AGRICULTURE

 

    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE

 

PART 240_CASH IN LIEU OF DONATED FOODS--Table of Contents

 

Sec. 240.1  General purpose and scope.









Sec.

240.1 General purpose and scope.

240.2 Definitions.

240.3 Cash in lieu of donated foods for program schools.

240.4 Cash in lieu of donated foods for nonresidential child and adult 

          care institutions.

240.5 Cash in lieu of donated foods for commodity schools.

240.6 Funds for States which have phased out facilities.

240.7 Payments to States.

240.8 Payments to program schools, service institutions, nonresidential 

          child care institutions and commodity schools.

240.9 Use of funds.

240.10 Unobligated funds.

240.11 Records and reports.



    Authority: 42 U.S.C. 612c note, 1751, 1755, 1762a, 1765, 1766, 1779.



    Source: 47 FR 15982, Apr. 13, 1982, unless otherwise noted.





    (a) Each school year the Department programs agricultural 

commodities and other foods to States for delivery to program and 

commodity schools, nonresidential child care institutions, and service 

institutions pursuant to the regulations governing the donation of foods 

for use in the United States, its territories and possessions and areas 

under its jurisdiction (7 CFR part 250).

    (b) Section 6(b) of the Act requires that not later than June 1 of 

each school year, the Secretary shall make an estimate of the value of 

the agricultural commodities and other foods that will be delivered 

during that school year for use in lunch programs by schools 

participating in the National School Lunch Program (7 CFR part 210). If 

this estimate is less than the total level of assistance authorized 

under section 6(e) of the Act the Secretary shall pay to the State 

administering agency not later than July 1 of that school year, an 

amount of funds equal to the difference between the value of donated 

foods as then programmed for that school year and the total level of 

assistance authorized under such section.

    (c) Section 6(e)(1) of the Act requires:

    (1) That for each school year, the total commodity assistance, or 

cash in lieu thereof, available to each State for the National School 

Lunch Program shall be the amount obtained by multiplying the national 

average value of donated foods, described in paragraph (c)(2) of this 

section, by the number of lunches served in that State in the preceding 

school year; and

    (2) That the national average value of foods donated to schools 

participating in the National School Lunch Program, or cash payments 

made in lieu thereof, shall be 11 cents, adjusted on July 1, 1982, and 

each July 1 thereafter to reflect changes in the Price Index for Food 

Used in Schools and Institutions. Section 6(e)(1) further requires that 

not less than 75 percent of the assistance under that section shall be 

in the form of donated foods for the National School Lunch Program. 

After the end of each school year, FNS shall reconcile the number of 

lunches served by schools in each State with the number



[[Page 279]]



served in the preceding school year and, based on such reconciliation, 

shall increase or reduce subsequent commodity assistance or cash in lieu 

thereof provided to each State.

    (d) Section 12(g) of the Act provides that whoever embezzles, 

willfully misapplies, steals, or obtains by fraud any funds, assets, or 

property that are the subject of a grant or other form of assistance 

under this Act or the Child Nutrition Act of 1966, whether received 

directly or indirectly from the United States Department of Agriculture, 

or whoever receives, conceals, or retains such funds, assets, or 

property to his use or gain, knowing such funds, assets, or property 

have been embezzled, willfully misapplied, stolen, or obtained by fraud 

shall, if such funds, assets, or property are of the value of $100 or 

more, be fined not more than $10,000 or imprisoned not more than five 

years, or both, or, if such funds, assets, or property are of a value of 

less than $100, shall be fined not more than $1,000 or imprisoned for 

not more than one year, or both.

    (e) Section 14(f) of the Act provides that the value of foods 

donated to States for use in commodity schools for any school year shall 

be the sum of the national average value of donated foods established 

under section 6(e) of the Act and the national average payment 

established under section 4 of the Act. Section 14(f) also provides that 

such schools shall be eligible to receive up to five cents of such value 

in cash for processing and handling expenses related to the use of the 

donated foods.

    (f) Sections 17(h)(1) (B) and (C) of the Act provide that the value 

of commodities, or cash in lieu thereof, donated to States for use in 

nonresidential child or adult care institutions participating in the 

Child and Adult Care Food Program (7 CFR part 226) for any school year 

shall be, at a minimum, the amount obtained by multiplying the number of 

lunches and suppers served during the preceding school year by the rate 

established for lunches for that school year under section 6(e) of the 

Act. At the end of each school year, FNS shall reconcile the number of 

lunches and suppers served in participating institutions in each State 

during such school year with the number of lunches and suppers served in 

the preceding school year and, based on such reconciliation, shall 

increase or reduce subsequent commodity assistance or cash in lieu of 

commodities provided to each State.

    (g) Section 16 of the Act provides that a State which has phased out 

its food distribution facilities prior to June 30, 1974, may elect to 

receive cash payments in lieu of donated foods for the purposes of the 

applicable child nutrition programs--i.e., the National School Lunch 

Program, the Summer Food Service Program for Children (7 CFR part 225) 

and the Child Care Food Program.

    (h) These regulations prescribe the methods for determination of the 

amount of payments, the manner of disbursement and the requirements for 

accountability for funds when these respective statutory authorities 

require the Department to make cash payments in lieu of donating 

agricultural commodities and other foods.



[47 FR 15982, Apr. 13, 1982, as amended at 52 FR 7267, Mar. 10, 1987; 58 

FR 39120, July 22, 1993]