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The apportionment to each of those American Samoa, the amount to be alloStates shall be in an amount which bears cated to each of those States being an the same ratio to the total of such funds amount which bears the same ratio to as the number of free or reduced-price the total funds for such States as the lunches served in accordance with $ 210.9 number of children aged 3 to 17, incluin those states in the preceding fiscal sive, in each bears to the total number of year bears to the total number of free or children of such ages in all of them; and reduced-price lunches so served in all (2) the remaining funds shall be allothose States in the preceding fiscal year. cated to States other than Puerto Rico, Of the remaining amount made available the Virgin Islands, Guam, and American for special cash-for-food assistance un- Samoa, in an amount for each State der section 11 of the Act for any fiscal which bears the same ratio to such reyear, not less than 50 percent shall be maining funds as (i) the number of apportioned among the States, other children in that State aged 3 to 17, incluthan Puerto Rico, the Virgin Islands, sive, in families with incomes of less than Guam, and American Samoa, on the basis

$3,000 per annum, and (ii) the number of of two factors, (1) the number of free or children in that State aged 3 to 17, inclureduced-price lunches served in accord

sive, in families receiving an annual inance with $ 210.9 in the preceding fiscal come in excess of $3,000 per annum from year and (2) the assistance need rate,

payments under the program of aid to These factors shall be applied in the fol- families with dependent children pursulowing manner: First, determine an ant to a State plan approved under title index for each State by multiplying fac- IV of the Social Security Act bears to the tors (1) and (2) of this paragraph; sec- total number of such children in all such ond, divide this index by the sum of the States. indices for all such States; and, third, (h) A share of the supplemental funds apply the figure thus obtained to the

so allocated to any State shall be withtotal funds to be apportioned. Any held by C&MS for the nonprofit private funds so initially apportioned to a State schools of that State, if the State agency under section 11 of the Act which can- does not administer the program in such not be used for special cash-for-food

schools. The withholding of funds for and assistance together with the remainder the disbursement thereof to nonprofit of the funds available under section 11

private schools shall be effected in acshall be further apportioned on the same cordance with section 10 of the National basis as the initial apportionment to such School Lunch Act, as amended, excluStates which justify the need for addi

sive of the matching provision thereof. tional funds on the basis of operating

(Amdt. 4, 30 F.R. 15402, Dec. 15, 1965, as experience.

amended by Amdt. 9, 33 FR. 18006, Dec. 4, (f) A share of the special cash-for- 1968] food assistance funds apportioned to any State shall be withheld by C&MS for the

$ 210.5 Payment to States. nonprofit private schools of that State, (a) The general cash-for-food assistif the State Agency does not administer ance funds apportioned to any State the Program in such schools. The funds shall be made available by means of Letso withheld by C&MS shall be an amount ters of Credit issued by C&MS to approwhich bears the same ratio to the special priate Federal Reserve Banks in favor cash-for-food assistance funds appor- of the State Agency. Such Letters of tioned to the State as the number of free Credit shall be designed to provide funds and reduced-price lunches served in ac- for the State Agency for the operation of cordance with $ 210.9 in the preceding the Program in such amounts and at fiscal year by all nonprofit private schools such times as the funds are needed to participating in the Program in the State reimburse schools. As soon as practi. bears to the number of free and reduced- cable after funds are made available to price lunches so served during the year C&MS, C&MS shall prepare a Letter of by all schools participating in the Pro- Credit for each State with which it has gram in the State.

an approved agreement. Such Letters (g) Supplemental funds made avail- of Credit shall contain 10 cumulative able from Section 32 funds (Act of monthly limitations, except that for August 24, 1935, as amended) are to be American Samoa, Guam, Puerto Rico tentatively allocated as follows: (1) and the Virgin Islands, the Letter of Three percent shall be allocated to Puerto Credit shall contain 8 cumulative month. Rico, the Virgin Islands, Guam, and ly limitations. These cumulative limita

tions shall be in accordance with the supplemental funds in an amount not to monthly pattern of participation in each exceed 60 percent of the State's tentative State, as measured by the number of allocation shall so be made available. Fi. lunches served, based upon the most re- nal apportionments and increases in cent year for which final participation amounts made available, up to the data are available. The first amount amount of the tentative allocation, shall authorized shall be for July and August be made on the basis of justifications of operations, and the final amount author- the need for additional funds submitted ized shall be for May and June operations by the States. except that for American Samoa, Guam, (c) The State Agency shall return to Puerto Rico and the Virgin Islands, the C&MS any Federal funds paid to it under final amount authorized shall be for the Program which are unobligated at March, April, May, and June operations. the end of each fiscal year. Such return Notwithstanding the foregoing provi- shall be made as soon as practicable but sions, if funds have been authorized by in any event not later than 30 days folCongress for the operation of the Pro- lowing demand made by FDAO. The gram under a continuing resolution, Let- State Agency shall also pay to C&MS any ters of Credit shall reflect only the interest paid or credited on Federal funds amounts authorized for the effective pe- paid to it under the Program. riod of the resolution, with appropriate [28 F.R. 1248, Feb. 8, 1963, as amended by monthly limitations. The State Agency Amdt. 3, 29 F.R. 14619, Oct. 27, 1964; Amdt. 4, shall obtain funds needed to reimburse 30 F.R. 15402, Dec. 15, 1965; Amdt. 9, 33 F.R. schools through presentation by des- 18006, Dec. 4, 1968) ignated State officials of a Payment

§ 210.6 Matching of funds. Voucher on Letter of Credit (Treasury Department Form TUS 5401) to a local

(a) During any fiscal year, payments commercial bank for transmission to the

made by C&MS to each State Agency, or appropriate Federal Reserve Bank, in

the aggregate payment made by C&MS to accordance with procedures prescribed

nonprofit private schools in any State, by C&MS and approved by the United

shall be upon the condition that each States Treasury Department. The State

dollar thereof shall be matched by three Agency shall draw only such funds as

dollars of funds from sources within the are needed to pay claims certified for

State: Provided, however, That if the per payment and shall use such funds with- capita income of any State is less than out delay to pay the claims. State Agen

the per capita income of the United cies shall report information on the

States, the matching requirement for status of Program funds on a monthly

any fiscal year shall be decreased by the basis to C&MS on a form provided for it.

percentage which the State per capita Notwithstanding the foregoing provision

income is below the per capita income of for the use of Letters of Credit, Program

the United States. funds shall be made available to the State

(b) Funds from sources within the Agency in the District of Columbia by State shall include: (1) Funds expended means of Treasury Department checks for the Program, including Program adon the same monthly basis as is pre

ministration, by the State or its political scribed for payments made by Letters subdivisions or by or on behalf of any of Credit.

school, from children's payments or from (b) The special cash-for-food assist- any other source of State or local funds, ance funds apportioned to any State except funds expended for land or the Agency for any fiscal year shall be made acquisition, construction or alteration of available in accordance with the method buildings; and (2) the value of commodiset forth in this section for general cash- ties, services, supplies, facilities, and for-food assistance, and to the extent equipment donated to the Program, expracticable shall be in accordance with cept the value of commodities donated by the same schedules.

FDAO or the value of land or the rental (6-1) The supplemental funds allo

value of buildings used in connection cated to any State agency for any fiscal

with the Program. The value of donayear shall be made available in accord- tions eligible for matching shall be certiance with the method set forth in this

fied by the State Agency or by the nonsection for general cash-for-food assist- profit private schools administered by ance funds, and, to the extent practic- FDAO. able, shall be made available in accord- (c) It shall be the responsibility of the ance with the same schedules. Initially, State Agency, or FDAO where applicable, to determine whether the matching re- termining the eligibility of children for quirements of the Act are being met. In a free or reduced price lunch. Such statethe event it appears that the matching ment shall include a plan for collecting requirements will not be met, the State payments from paying children and acAgency or FDAO shall take corrective ac- counting for free or reduced price tion to assure compliance with these lunches which will protect the anorequirements.

nymity of the children receiving free or (d) In the event any State fails to reduced price lunches in order that such match the full amount of the Federal children shall not be identified as such funds advanced to it, the State shall re- to their peers. As a minimum, such criturn to C&MS the amount of the Federal teria shall include the level of family funds which it failed to match.

income (including welfare grants), the (e) In any State where the aggregate number in the family unit, and the numpayment of Federal funds to private ber of children in the family in attendschools administered by FDAO is not ance. Such policy statement shall be matched, any individual school not written, publicly announced and applied matching the Federal funds paid to it equitably to the children in all such shall return to C&MS its pro rata share attendance units. of the amount of the Federal funds de- (b) Applications shall include the termined by C&MS not to have been name and address of the school and the matched.

following information: (1) The begin(f) Notwithstanding the provisions of ning date of lunch service under the the foregoing paragraphs of this section, Program; (2) the estimated average daily no matching of funds shall be required attendance or membership; (3) the with respect to special cash-for-food lunch price to be charged children; (4) assistance.

the estimated daily number of free or [28 F.R. 1248, Feb. 8, 1963, as amended by

reduced price lunches to be served; and Amdt. 4, 30 F.R. 15402, Dec. 15, 1965]

(5) the amount of funds and the value

of food on hand for the Program at the & 210.7 Use of funds.

time of application. (a) Federal funds available as cash- (c) Selection of schools for participafor-food assistance shall be used only tion in the Program shall be in accordto reimburse schools in connection with ance with the following: lunches served to children of high school (1) Schools shall be selected for pargrade or under in accordance with the ticipation in the general cash-for-food provisions of this part during the fiscal assistance phase of the Program on the year for which such funds are appro- basis of need and attendance. priated.

(2) Schools shall be selected for par(b) Income accruing to the lunch pro- ticipation in the special cash-for-food gram of any school shall be used only for

assistance phase of the Program on the Program purposes: Provided, however, basis of the following factors: (1) The That such income shall not be used to

economic condition of the area from purchase land, to acquire or construct which such schools draw attendance; (ii) buildings, or to make alterations of ex

the needs of pupils in such schools for isting buildings: And provided further, free and reduced-price lunches; (iii) the That only funds from sources other than

percentage of free and reduced-price Federal or children's payments for lunches being served in such schools to lunches shall be used to finance out-of

their pupils; (iv) the prevailing price State travel of school lunch personnel or of lunches in such schools as compared the purchase of automotive equipment.

with the average prevailing price of (28 F.R. 1249, Feb. 8, 1963)

lunches served in the State under the $ 210.8 Requirements for participation.

National School Lunch Act and (v) the

need of such schools for additional as(a) Any school not participating in the

sistance as reflected by the financial posiProgram in the previous fiscal year shall

tion of the school lunch program in such make written application for participa

schools. (For the purposes of subdivition to the State Agency, or FDAO where

sion (v) of this subparagraph the need applicable.

for additional assistance shall mean the (2-1) Each school participating in the need for reimbursement at rates above Program shall develop a policy statement nine cents per Type A lunch.) The need covering the criteria used in the attend- for special assistance out of section 11 ance units under its jurisdiction in de- funds shall be reviewed annually.

(3) Except as provided in this subparagraph, no school which operates the food or milk service in any attendance unit under a contractual arrangement with a concessionaire or food service management company or under a similar arrangement shall be eligible for participation in the program with respect to such attendance unit, even though the school or such attendance unit obtains no profit from the operation of such food or milk service. The State agency,

or CFPDO where applicable, may authorize a school to operate under the program, through fiscal year 1970, under a contract with a food service management company, on a pilot, experimental basis: Provided, That (i) such operation will extend food service to needy children not previously benefiting from the program, (ii) the contract with the food service management company is one which is substantially in conformity with the applicable prototype contract published in the FEDERAL REGISTER and (iii) the contract is approved by the State agency, or CFPDO where applicable, and the Department in advance of the beginning of the food service.

(d) Schools selected for participation shall enter into a written agreement with the State Agency or, in those states in which FDAO administers the Program in private schools, such private schools shall enter into an agreement with the Department. Such agreements shall be on a form approved by FDAO and shall provide that the school shall:

(1) Operate a nonprofit lunch program and observe the limitations on the use of program income set forth in $ 210.7(b);

(2) Limit its operating balance to a level consistent with Program needs;

(3) Serve lunches which meet the minimum requirements prescribed in $ 210.9 during a period designated as the lunch period by the school.

(4) Price the Type A lunch as a unit;

(5) Supply lunches without cost or at reduced price to all children who are determined by local school authorities to be unable to pay the full price thereof;

(6) Make no discrimination against any child because of his inability to pay the full price of the lunch;

(7) Claim reimbursement only for the type or types of lunches specified in the agreement;

(8) Submit claims for reimbursement in accordance with procedures estab

lished by the State Agency, or FDAO where applicable;

(9) Maintain, in the storage, preparation and service of food, proper sanitation and health standards in conformance with all applicable State and local laws and regulations;

(10) Purchase, in as large quantities as may be efficiently utilized in its lunch program, foods designated as plentiful by the State Agency, or FDAO where applicable;

(11) Accept and use, in as large quantities as may be efficiently utilized in its lunch program, such foods as may be offered as a donation by the Department;

(12) Maintain necessary facilities for storing, preparing and serving food;

(13) Maintain full and accurate records of its lunch program, including records with respect to the following:

(1) Lunch service. (a) Daily number of lunches served to children, by type of lunch.

(6) Daily number of lunches served free or at reduced price to children, by type of lunch.

(c) Daily number of adults eating in the lunchroom (unless the income from food sales to adults is maintained as a separate account under subdivision (1) (c) of this subparagraph).

(i) Program income (receipts). (a) From children's payments.

(b) From Federal school lunch reimbursement.

(c) From all other sources, including Federal reimbursement under the Special Milk Program and the School Breakfast Program.

(ii) Program expenditures for the School Lunch, Special Milk, and School Breakfast Programs. (Supported by invoices, receipts, or other evidence of expenditures.)

(a) For food.
(6) For labor.
(c) All other expenditures.

(iv) Value of donations to Program. (a) Donated food, exclusive of foods donated by the Department.

(6) Donated services.

(c) All donations other than food and services. Such records shall be retained for a period of three years after the end of the fiscal year to which they pertain.

(14) Upon request, make all accounts and records pertaining to its lunch program available to the State Agency and to C&MS, for audit or administrative review, at a reasonable time and place.

36-011—70

(e) Schools operating a lunch pro- (2) The State Agency, or the Congram under an agreement as provided in sumer Food Programs District Office, paragraph (d) of this section may serve C&MS, where applicable, may allow children from other schools whether or schools to serve to children in the elenot such other schools operate lunch mentary grades and preschool programs programs, and may make a claim for re- lesser quantities than are specified of the imbursement in connection with lunches items listed in subparagraph (1) (ii), served all children. In States in which (iii), and (v) of this paragraph (a). Any FDAO administers the program in non- such allowances must be based on the profit private schools, any public school lesser food needs of younger children. operating a lunch program under such If a sufficient supply of fluid whole milk an agreement may serve children from a cannot be obtained, the State Agency, or private school, or any private school op- the Consumer Food Programs District erating a lunch program under such an Ofice, C&MS, where applicable, may agreement may serve children from a authorize the service of the fluid whole public school, and separate claims for milk equivalent in reconstituted evaporeimbursement may be made in connec- rated or dry whole milk, or may approve tion with lunches served children from reimbursement for lunches served witheach type of school: Provided, however, out milk. If emergency conditions preThat both schools shall enter into a vent a school normally having a supply special agreement with the State Agency of fluid whole milk from temporarily and with the Department covering the obtaining delivery thereof, the State preparation and serving of lunches, the Agency, or the Consumer Food Programs keeping of records, and the submission District Office, C&MS, where applicable, of claims and reports.

may approve reimbursement for lunches (28 F.R. 1249, Feb. 8, 1963, as amended by served without milk during the emerAmdt. 4, 30 F.R. 15403, Dec. 15, 1965; Amdt. 6, gency period. If a sufficient supply of 32 F.R. 33, Jan. 5, 1967; Amdt. 8, 33 F.R. fluid whole milk is obtainable the State 15631, Oct. 23, 1968; Amdt. 10, 34 F.R. 807, Agency, or the Consumer Food Programs Jan. 18, 1969)

District Office, C&MS, where applicable, $ 210.9 Requirements for lunches.

may reimburse for lunches served with

out milk, provided each child is offered (a) (1) Except as otherwise provided

a Type A lunch with milk and no reducin this section, a Type A lunch shall con

tion is made in the price of the Type A tain, as a minimum, each of the follow

lunch. ing food components in the amounts

(b) A Type C lunch is one-half pint of indicated :

fluid whole milk. A school preparing (i) One-half pint of fluid whole milk

food shall not be approved to serve a as a beverage.

Type C lunch unless it is approved to (ii) Two ounces (edible portion as served) of lean meat, poultry, or fish; or

serve a Type A lunch.

(c) In American Samoa, Puerto Rico, two ounces of cheese; or one egg; or one

and the Virgin Islands the following half cup of cooked dry beans or peas;

variations from the lunch requirements or four tablespoons of peanut butter; or

are authorized: In the Type A and the an equivalent quantity of any combina

Type C lunch the milk requirement may tion of the above-listed foods. To be

be met by serving either fluid whole milk, counted in meeting this requirement,

or reconstituted dry whole or nonfat dry these foods must be served in a main dish

milk. In the Type A lunch, a serving of or in a main dish and one other menu

rice or a starchy vegetable, such as ufi, item. (iii) A three-fourth cup serving con

tanniers, yams, plantains, sweet pota

toes, or a serving of enriched or whole sisting of two or more vegetables or

grain cereal products, such as macaroni, fruits, or both. Full-strength vegetable

dumplings or noodles, may be substituted or fruit juice may be counted to meet not

for the bread requirement; and the minimore than one-fourth cup of this re

mum amount of butter or fortified marquirement.

garine may be reduced by one-half of (iv) One slice of whole-grain or en

the prescribed amount. riched bread; or a serving of cornbread,

(d) Substitutions may be made in the biscuits, rolls, mufins, etc., made of foods listed in paragraph (a) (1) of this whole-grain or enriched meal or flour. section if individual participating chil

(v) Two teaspoons of butter or forti- dren are unable, because of medical or fied margarine.

other special dietary needs, to consume

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