[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2009]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR249.12]

[Page 507-508]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 249_SENIOR FARMERS' MARKET NUTRITION PROGRAM (SFMNP)--Table of Contents
 
                    Subpart E_State Agency Provisions
 
Sec. 249.12  SFMNP costs.

    (a) General. (1) Composition of allowable costs. In general, a cost 
item will be deemed allowable if it is reasonable and necessary for 
SFMNP purposes and otherwise satisfies allowability criteria set forth 
in part 3016.22 of this title and this Part. SFMNP purposes include the 
administration and operation of the SFMNP. Allowable SFMNP costs may be 
classified as follows:
    (i) Food costs and administrative costs. Food costs are the costs of 
eligible foods provided to SFMNP participants. Administrative costs are 
the costs associated with providing SFMNP benefits and services to 
participants and generally administering the SFMNP. Specific examples of 
allowable administrative costs are listed in paragraph (b) of this 
section. A State agency may use up to 10 percent of its total Federal 
SFMNP grant to cover administrative costs. Any costs incurred for food 
and/or administration above the Federal grant level will be the State 
agency's responsibility.

[[Page 508]]

    (ii) Direct and indirect costs. Direct costs are food and 
administrative costs incurred specifically for the SFMNP. Indirect costs 
are administrative costs that benefit multiple programs or activities, 
and cannot be identified to any one program or activity without effort 
disproportionate to the results achieved. In accordance with the 
provisions of part 3016 of this title, a claim for reimbursement of 
indirect costs shall be supported by an approved allocation plan for the 
determination of such costs. An indirect cost rate developed through 
such an allocation plan may not be applied to a base that includes food 
costs.
    (2) Costs allowable with prior approval. A State or local agency 
must obtain prior approval in accordance with part 3016.22 of this title 
before charging to the SFMNP any capital expenditures and other cost 
items designated by part 3016.22 of this title as requiring such 
approval.
    (3) Unallowable costs. Costs that are not reasonable and necessary 
for SFMNP purposes, or that do not otherwise satisfy the cost principles 
of part 3016.22 of this title, are unallowable. Notwithstanding any 
other provision of part 3016 of this title or this Part, the cost of 
constructing or operating a farmers' market is unallowable. The use of 
SFMNP funds to supplement congregate meal programs is prohibited. 
Unallowable costs may never be claimed for Federal reimbursement.
    (b) Specified allowable administrative costs. Allowable 
administrative costs include the following:
    (1) The costs associated with administration and start-up;
    (2) The costs associated with the provision of nutrition education 
that meets the requirements of Sec. 249.9;
    (3) The costs of SFMNP coupon issuance, or participant education 
covering proper coupon redemption procedures;
    (4) The cost of eligibility determinations and outreach services;
    (5) The costs associated with the coupon and market management 
process, such as printing SFMNP coupons, processing redeemed coupons, 
purchasing bags or other containers to be used in home-delivery and bulk 
purchase operations, and training farmers, market managers, and/or 
farmers who operate CSA programs on SFMNP operations;
    (6) The cost of monitoring and reviewing Program operations;
    (7) The cost of SFMNP training;
    (8) The cost of required reporting and recordkeeping;
    (9) The cost of determining which local sites will be utilized;
    (10) The cost of recruiting and authorizing farmers, farmers' 
markets, roadside stands, and/or CSA programs to participate in the 
SFMNP;
    (11) The cost of preparing contracts for farmers, farmers' markets, 
roadside stands, and/or CSA programs;
    (12) The cost of developing a data processing system for redemption 
and reconciliation of SFMNP coupons;
    (13) The cost of designing program training and informational 
materials; and
    (14) The cost of coordinating SFMNP responsibilities between 
designated administering agencies.