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This communication provides additional guidance on the identification, accounting treatment, use, and reporting requirements of the supplemental $0.75 rate increase payments (supplemental increase) that the California Department of Education (CDE) has issued to program operators.
Payments for the supplemental increase made thus far are for April through August 2020 claims. March 2020 payments are still being processed, and sponsors can expect to receive payment for March 2020 in Spring 2021.
Background
The supplemental increase was made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act created the Elementary and Secondary School Emergency Relief (ESSER) Fund, which established a discretionary amount for the state educational agency reserve. The 2020‒21 Budget Act appropriated funds from the reserve for support for the National School Lunch Program, School Breakfast Program, Seamless Summer Option, and Summer Food Service Program. Hence, the supplemental increase payments, both federal and state, are for the support of School Nutrition Programs (SNP) and Summer Meal Programs (SMP).
Identification of Federal and State Funds
The CDE issued a communication on January 21, 2021, that provided program operators with instructions on how to identify the supplemental increase payments as federal CARES Act or state Proposition 98 funds. This communication can be found on the CDE Nutrition What’s New web page under the disaster tab, title 75 Cent Rate Increase Payment Information.
Accounting Treatment
The CDE School Fiscal Services Division has created two new standardized account code structure (SACS) resource codes to be used to record these supplemental increase revenues depending on if the funds were identified as federal or state. Once the funding source has been identified, please ensure the revenue is deposited in the cafeteria fund and recorded in the respective resource codes below:
Resource 5316, Child Nutrition: COVID CARES Act Supplemental Meal Reimbursement
Resource 7027, Child Nutrition: COVID State Supplemental Meal Reimbursement
Both resource codes are now available in the SACS tables of valid code combinations. If you have questions about the accounting for these funds using the new resource codes, please contact the School Fiscal Services Division at SACSINFO@cde.ca.gov.
Some charter schools do not use the SACS to account for program revenues and expenditures. Such agencies should ensure that revenues and expenditures are accounted for in a manner that demonstrates the deposit and use of funds for the SNP and SMP.
Use of Funds
Supplemental increase revenues are to be used only for the operation and improvement of the SNP and SMP and are subject to the same cost principles as other cafeteria funds.
Title 2, Code of Federal Regulations, Part 200 established uniform grant guidance for the use of federal awards. These regulations stipulated that capital expenditures with a per unit value of $5,000 must be approved by the state agency. Certain equipment items used for the Child Nutrition Programs have been preapproved by the state agency and can be found on the CDE Capital Expenditure Approved List web page. Local educational agencies that wish to purchase capital expenditures not on the approved list, should contact the Nutrition Services Division Resource Management Unit (RMU) for approval by emailing the request to snpcafefundquestions@cde.ca.gov.
For additional guidance on allowability of costs, please reference the CDE Cafeteria Funds—Allowable Uses Management Bulletin web page.
Reporting Requirements
Sponsors who received CARES funds are subject to annual reporting requirements. These funds must be included in the ESSER Fund Annual Report. These funds do not need to be included in the ESSER Quarterly Report, and if a sponsor received only State Prop 98 funds then no reporting is necessary. For more information regarding the reporting requirements please contact the Governmental Affairs Division at CARESAct@cde.ca.gov.
Contact Information
If you have questions regarding the allowability of costs in the SNPs, please contact the RMU by email at snpcafefundquestions@cde.ca.gov.
