USDA Publishes Child Nutrition Program Integrity Final Rule

On Wednesday, August 23, USDA published a final rule on program integrity to ensure that child nutrition programs are properly operated and managed to protect federal funds and taxpayer dollars. The final rule impacts the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program (SMP), Summer Food Service Program (SFSP), and Child and Adult Care Food Program (CACFP). The changes in the rule aim to simplify monitoring for NSLP and SBP by increasing flexibility and reducing redundancy and paperwork. All are actionable for State agencies but will impact school districts.

Specifically, the rule:  

Allows state agencies to return to a 5-year administrative review cycle and requires State agencies to conduct reviews on a longer than 3-year cycle to identify high-risk SFAs for additional oversight. 

Removes the requirement for state agencies to take fiscal action against SFAs for repeated violations of milk type and vegetable subgroup requirements. This aligns with the current State’s discretion to take fiscal action to address repeated violations of food quantity, whole grain-rich, and dietary specifications requirements.

With FNS approval, state agencies can substitute information from local-level audits for related parts of the administrative reviews.

Reduces the performance-based reimbursement reporting requirement from quarterly to annually, as most SFAs are already certified to receive it.

Allows State agencies to omit specific elements of the administrative review when equivalent oversight activities are conducted outside of the administrative review process—reducing redundancies.

Adopts a framework that State agencies may elect to modify the administrative review if the State agency or SFA adopts the specified integrity-focused improvements.

It gives State agencies the flexibility to conduct the assessment of an SFA’s nonprofit school food service account at any point in the review process.

Includes compliance with the Buy American requirement as part of the general areas of the administrative review.

Allows State agencies to conduct the FSMC review on a 5-year cycle.