[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: 7CFR247.25]



[Page 416-417]

 

                          TITLE 7--AGRICULTURE

 

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

 

PART 247_COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents

 

Sec. 247.25  Allowable uses of administrative funds and other funds.



    (a) What are allowable uses of administrative funds provided to 

State and local agencies? Administrative funds may be used for costs 

that are necessary to ensure the efficient and effective administration 

of the program, in accordance with parts 3016 and 3019 of this title. 

Part 3016 of this title contains the rules for management of Federal 

grants to State, local, and Indian tribal governments, and part 3019 of 

this title contains the grants management rules for nonprofit 

organizations. These departmental regulations incorporate by reference 

OMB Circulars A-87 (Cost Principles for State, Local, and Indian Tribal 

Governments) and A-122 (Cost Principles for Non-Profit Organizations), 

which set out the principles for determining whether specific costs are 

allowable. For availability of OMB Circulars referenced in this section, 

see 5 CFR 1310.3. Some examples of allowable costs in CSFP include:

    (1) Storing, transporting, and distributing foods;

    (2) Determining the eligibility of program applicants;

    (3) Program outreach;

    (4) Nutrition education;

    (5) Audits and fair hearings;

    (6) Monitoring and review of program operations; and

    (7) Transportation of participants to and from the local agency, if 

necessary.

    (b) What are unallowable uses of administrative funds? In addition 

to those costs determined to be unallowable by the principles contained 

in the OMB circulars referenced in paragraph (a) of this section, 

specific examples of unallowable uses of administrative funds in CSFP 

include:

    (1) The cost of alteration of facilities not required specifically 

for the program; and

    (2) Actual losses which could have been covered by permissible 

insurance (through an approved self-insurance program or by other 

means).

    (c) What costs are allowable only with prior approval of FNS? 

Capital expenditures, which include the acquisition of facilities or 

equipment, or enhancements to such capital assets, with a cost per unit 

of at least $5,000, are allowable only with prior approval of FNS. 

Examples of equipment include automated information systems, automated 

data processing equipment, and other computer hardware and software.

    (d) What procedures must State and local agencies use in procuring 

property, equipment, or services with program funds, and disposing of 

such property or equipment? The procedures that State and local agencies 

must follow in procuring property, equipment, or services with program 

funds, or disposing of such property or equipment, are contained in 

parts 3016 and 3019 of this title. State, local, and Indian tribal 

governments must comply with part 3016 of this title, while nonprofit 

subgrantees must comply with part 3019 of this title. State and local 

agencies may use procurement procedures established by State and local 

regulations as long as these procedures do not conflict with Federal 

regulations. Federal regulations do not relieve State or local agencies 

from responsibilities established in contracts relating to procurement 

of property, equipment, or services. The State agency is the responsible 

authority regarding the settlement of all contractual and administrative 

issues arising out of procurements for the program.

    (e) What is program income and how must State and local agencies use 

it? Program income is income directly generated from program activities. 

It includes, for example, income from the sale of packing containers or 

pallets, and the salvage of commodities. Program income does not include 

interest earned from administrative funds. State and local agencies must 

use program income for allowable program



[[Page 417]]



costs, in accordance with part 3016 of this title.

    (f) How must State and local agencies use funds recovered as a 

result of claims actions? The State agency must use funds recovered as a 

result of claims actions against subdistributing or local agencies in 

accordance with the provisions of Sec. 250.15(c) of this chapter. The 

State agency must use funds recovered as a result of claims actions 

against participants for allowable program costs. The State agency may 

authorize local agencies to use such funds for allowable program costs 

incurred at the local level.