Summer Food Service Program: Program Meal Service During the School Year, Paperwork Reduction, and Targeted State Monitoring

Federal RegisterDec 29, 1999

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 225

RIN 0584-AC06

Summer Food Service Program: Program Meal Service During the

School Year, Paperwork Reduction, and Targeted State Monitoring

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule contains changes to the Summer Food Service

Program as a result of a provision in the Healthy Meals for Healthy

Americans Act of 1994 which allows Program meal service to be provided

during periods of unanticipated school closures such as teacher

strikes. Additionally, this rule makes discretionary changes to

simplify sponsor and site applications and State agency monitoring

requirements. Except for the State agency monitoring requirements,

which were changed substantially, the final rule makes only minor

modifications to the provisions of the proposed rule. These changes are

intended to reduce unnecessary and duplicative administrative burdens

for Summer Food Service Program sponsors and State agencies.

EFFECTIVE DATE: January 28, 2000.

FOR FURTHER INFORMATION CONTACT: Melissa Rothstein (Summer Food Service

Program) at the following address: Policy and Program Development

Branch, Child Nutrition Division, Room 1006, Food and Nutrition

Service, USDA, 3101 Park Center Drive, Alexandria, Virginia 22302-1500,

or by telephone at: (703) 305-2620.

SUPPLEMENTARY INFORMATION:

Background

The Summer Food Service Program (SFSP) provides free meals to

children at approved feeding sites in areas with significant

concentrations of low-income children during school vacations. SFSP

meals are intended to take the place of the meals that children

normally receive through the National School Lunch and Breakfast

Programs during the school year.

Generally, Program benefits are limited to times when school is not

[[Page 72890]]

session during the months of May through September. Section 13(c)(1) of

the National School Lunch Act (NSLA) (42 U.S.C. 1761(c)(1)) provides an

exception to these timeframes for areas that operate on a year-round,

or continuous school calendar basis. In these areas, Program benefits

may be provided at any time of the year that children are on school

vacation. An additional exception was authorized by the Healthy Meals

for Healthy Americans Act of 1994 (Pub. L. 103-448), which permits the

SFSP to operate in areas with unanticipated school closures during

October through April.

On October 13, 1998, we published a proposed rule for the SFSP in

the Federal Register (63 FR 54617). The rule proposed changes to the

Program in the following three areas:

Unanticipated school closures. The proposed rule set forth

criteria for participation of sponsors and sites in the SFSP during

periods of unanticipated (i.e., emergency) school closures during the

months of October through April, and included language from Pub. L.

103-448 on the types of situations that qualify;

Paperwork reduction. The proposed rule removed unnecessary

and duplicative sponsor and site application requirements for

experienced sponsors and sites; and,

Targeted State agency monitoring. The proposed rule

revised State agency monitoring requirements to better target efforts

to new and large sponsors, and those sponsors who have operational

deficiencies or experience significant staff turnover from one year to

the next.

The proposed rule had a sixty day public comment period which ended

on December 14, 1998. During this time, we received a total of 17

comments. Of these, 13 were from State agencies, 2 were from SFSP

sponsors (both of which were local school districts), and 2 were from

community organizations. In general, commenters were supportive of the

proposed rule. Every commenter addressed the area of ``paperwork

reduction'' in some capacity, and primarily viewed the changes as

positive with only minor modifications needed. The final rule is being

published based on these comments.

A. Unanticipated School Closures

General Discussion

Since the beginning of the SFSP, there have been times when a

single school or an entire school system did not open as scheduled at

the end of the summer (e.g., in the case of a teacher strike). Prior to

1994, the NSLA prohibited the SFSP to operate during the months of

October through April unless the school was in session on a year-round

or continuous school calendar basis. Since the National School Lunch

and Breakfast Programs may only operate when school is in session, many

children were denied a nutritious meal when the schools were closed in

these emergency situations.

In response to these circumstances, the President signed into law

the Healthy Meals for Healthy Americans Act of 1994. Section 114(c) of

this law amended section 13(c)(1) of the NSLA to allow SFSP meals to be

served at ``non-school sites to children who are not in school for a

period during the months of October through April due to a natural

disaster, building repair, court order or similar cause''.

Proposed Rule Provisions

In addition to setting forth the circumstances warranting

implementation, the October 13, 1998, proposed rule detailed how

existing requirements for SFSP participation would be applied when the

Program operates during unanticipated school closures. Specifically,

the proposed rule:

Listed circumstances under which SFSP sponsors and sites

are eligible to participate in the Program during unanticipated school

closures. These circumstances included natural disaster, major building

repairs, court orders relating to school safety or other issues, labor-

management disputes, and similar causes as approved by the State

agency;

In accordance with the explicit language of the law,

permitted only non-school sites to be eligible feeding sites in these

situations, although school food authorities would be eligible as

sponsors;

Waived eligibility documentation for sites that had

previously participated in the SFSP in the current year or prior two

calendar years; documentation of site eligibility was still required

for all other sites;

Streamlined the application process for sponsors which had

successfully participated in the Program in the current year or either

of the two prior calendar years;

Required that all sponsors participating during

unanticipated school closures enter into agreements with the State

agency to operate the Program; and

Provided State agencies discretion in conducting pre-

approval visits of sponsors operating the Program during unanticipated

school closures, but maintained the requirement that sponsors visit all

of their feeding sites prior to Program operations.

Comments Received and Final Rule Provisions

Non-School Sites

Six commenters expressed concern that the proposed rule did not

allow school sites to participate in the SFSP during unanticipated

school closures. In general, respondents believe that schools are

accessible to the community at large and, a uniform prohibition on

using those sites as feeding sites during all emergency situations

might deny eligible children SFSP meals when they most need them.

Although we agree that school buildings are sometimes the most

capable and logical feeding sites (e.g., during a natural disaster),

Pub. L. 103-448 explicitly excludes school sites from participating in

these situations. Therefore, this final rule retains the provision as

set forth in the proposed rule. We recommend that local areas that

encounter unanticipated school closures in which a school feeding site

is the only viable option, should contact their State agency to find

acceptable alternatives, or to explore the possibility of requesting a

waiver of this provision from the Department under section 12(l) of the

NSLA (42 U.S.C. 1760(l)). We will consider these requests on a case-by-

case basis. We do not anticipate granting waivers in situations of

unanticipated school closures involving labor-management disputes at

school sites unless the safety of the children being fed at the site

can be insured. Under this rule, school food authorities that meet the

sponsor eligibility requirements may serve as sponsors during

unanticipated school closures.

Sponsor Applications

We received one comment expressing concern about allowing

experienced sponsors to participate in the Program without a current

year application. The commenter indicated that sponsor information can

change significantly from year to year, and recommended that we retain

the application requirements found in the current regulations. State

agencies that have concerns about the accuracy of the information they

already have on file can choose to require that sponsors complete a new

application in these circumstances. However, we believe the need to

begin program operations quickly in these situations usually outweighs

the need for collecting new application information from sponsors who

have participated in the Program within the last three years.

Accordingly, this final rule retains the streamlined application

provision for experienced sponsors seeking to operate the Program

[[Page 72891]]

during unanticipated school closures. This provision is set forth in

Sec. Sec. 225.6(c)(1) and 225.14(a) of this final rule.

Year-Round Sites

One commenter expressed concern that the provisions for

unanticipated school closures do not include year-round, or continuous

school calendar, SFSP sponsors. The commenter was concerned that the

type of unanticipated school closures discussed in Pub. L. 103-448 and

the proposed rule could occur at any time of the year, not just during

October through April. We agree with the commenter, and do not believe

the law intended to exclude sponsors in year-round school communities

from being able to provide SFSP meal service during unanticipated

school closures.

Accordingly, this final rule adds language clarifying that the

unanticipated school closure provisions of the regulations apply to

areas operating under a continuous school calendar system. In these

areas, this authority is not restricted to closures that occur during

the months of October through April, but rather is available at any

time of the year. These revisions appear in this final rule in

Sec. Sec. 225.6(b)(1); 225.6(b)(4); 225.6(c)(1); 225.6(c)(2)(i)(G);

225.6(c)(3)(i)(B); 225.7(a); 225.7(d)(1)(i); 225.14(a); and

225.15(d)(1).

Other Provisions/Clarifying Language

We received a few comments pertaining to the meaning of ``current

year or prior two calendar years'' in describing those sponsors who are

exempt from application and other requirements during unanticipated

school closures. One commenter suggested an editorial change to be more

specific with our intent of prior participation in the Program at any

time within three years. Therefore, we are amending the language of the

final rule to read ``current year or in either of the prior two

calendar years.'' These changes are contained in Secs. 225.6(b)(4);

225.6(c)(1); 225.6(c)(2)(i)(G); 225.6(c)(3)(i)(B); and 225.14(a) of

this final rule.

We received no comments on the remaining provisions of the proposed

rule on operation of the SFSP during unanticipated school closures.

Accordingly, this final rule retains these provisions as set forth in

the proposed rule. These provisions are contained in this final rule at

Secs. 225.6(c)(2)(i)(G) and 225.6(c)(3)(i)(B) (documentation of site

eligibility); Sec. 225.7(d)(1)(i) (pre-approval visits by State

agencies); and Sec. Sec. 225.7(a) and 225.15(d) (training by State

agencies and sponsors).

B. Paperwork Reduction

Proposed Rule Provisions

The proposed rule took the minimum application requirements for

SFSP sponsors and sites found in current Sec. 225.6(c)(2) and

reorganized and substantially revised them. The proposed rule

established separate minimum requirements for: (1) New sponsors and

sites, and those with significant operational problems in the prior

year; and (2) experienced sponsors and sites. In the proposed rule,

paragraph (c)(2) contained the requirements for new sponsors/sites and

sponsors/sites with significant operational problems, and paragraph

(c)(3) contained the requirements for experienced sponsors/sites. The

application requirements were grouped and discussed in the preamble to

the proposed rule as general requirements that apply to all types of

sponsors and sites and requirements that are specific to certain types

of sites, such as open sites, enrolled sites, migrant sites, and

homeless sites.

In light of this new structure, and to help clarify application

requirements for sponsors and sites with varying degrees of experience

and/or success in operating the Program, new definitions were included

in the proposed rule in Sec. 225.2 for ``new sponsor,'' ``new site,''

``experienced sponsor,'' and ``experienced site.'' The proposed rule

eliminated duplicative and unnecessary requirements for experienced

sponsors, with the intent of reducing the paperwork associated with the

application process for these sponsors.

The proposed rule also contained new definitions of ``open site,''

``closed enrolled site,'' and ``open enrolled site.'' These definitions

were used in setting forth the application requirements, and included

in the rule to clarify how each type of Program site demonstrates

eligibility.

Comments Received and Final Rule Provisions

We received a total of 17 comments in the area of Paperwork

Reduction. In general, commenters were supportive of the changes to the

Program outlined in the proposed rule with only minor modifications

needed. The concerns of commenters and a discussion of these concerns

are provided below.

General Comments

A few commenters expressed concern that paperwork is not reduced

under the proposed rule, but rather increased as State agencies will

need to keep separate records for experienced and new sponsors. In

addition, several commenters expressed concern that the integrity of

SFSP may be compromised if we do not require all information currently

required of SFSP sponsors on an annual basis, as information can change

significantly from year to year for experienced sponsors.

In response to these comments, we do not anticipate an increase in

administrative burden once the changes are implemented. As with any new

system, it may take additional time to create a system that

appropriately determines and tracks new sponsors, sponsors with

significant operational problems, and experienced sponsors. However,

there is flexibility in how a State agency implements these provisions.

As we indicated in the preamble to the proposed rule, the requirements

set forth in the regulations are minimum requirements. State agencies

may include other provisions in their applications as long as they do

not establish additional requirements for SFSP participation.

State Agency Classification of Sponsors

We also received several comments in the area of State agency

classification of sponsors. Commenters suggested that we provide State

agencies with guidelines for categorizing sponsors as having

significant staff turnover or significant operational problems. We do

not believe it is necessary nor prudent to include specific guidelines

for making sponsor classifications in the final rule. We prefer to

leave this discretion to State agencies to make assessments on a case-

by-case basis. In making these classifications, State agencies should

consider the deficiencies, if any, noted in monitoring visits, reports

that have been received about the sponsor or any of its sites, and

whether staff in key positions have changed.

Commenters also indicated that sponsors who experience significant

operational problems should be required to attend more training or

should be monitored more frequently by the State agency, not merely be

required to submit more paperwork or information to the State agency.

We believe providing additional training and monitoring for sponsors

with operational problems is important, and encourage State agencies to

do so. However, we also believe there is value in having these sponsors

fully document their plans for administering the Program through the

application process. This documentation helps ensure that they have a

thorough understanding of Program requirements and responsibilities.

[[Page 72892]]

Definitions

One commenter recommended including in the definition of

experienced sponsor, a requirement that the sponsor had to have

successfully completed an application to participate in the Program in

the prior year. We do not believe this change is necessary. We believe

the fact that a sponsor is experienced clearly implies that the

organization must have successfully completed an application.

Therefore, we are not including the commenter's recommendation in the

final rule.

Another commenter proposed eliminating the word ``successful'' from

``successful participation'' as a criterion to be classified as an

experienced sponsor. We agree that the term ``successful'' is a

subjective term. However, we believe it conveys the appropriate

meaning. Therefore, we are retaining it in the definition of

experienced sponsor in Sec. 225.2 of the final rule.

We received one comment requesting that the reference to using data

``from other appropriate sources'' found in paragraph (a)(3) of the

definition of ``areas in which poor economic conditions exist'' in

Sec. 225.2 needs to be better defined. As mentioned in the proposed

rule, to determine if a site is located in a low-income area, State

agencies should first consult school data to determine if the site

meets the criteria that 50 percent or more of children are eligible for

free or reduced-price meals. Census data may be used to determine site

eligibility in certain circumstances where it is more representative of

an area's socioeconomic status than school data. If neither school nor

census data indicates that a site is area eligible but ``other'' data

sources do, State agencies must consult with FNS to assess the

appropriateness of that data as an indicator of an area's socioeconomic

status. Though it is used rarely, for these unique situations, we

believe it is important to retain the language ``from other appropriate

sources'' in the final rule as it provides some flexibility in

determining if a source provides substantial evidence of being a low-

income area.

We received several comments on the proposed rule's definitions of

``open site,'' ``closed enrolled site,'' and ``open enrolled site.''

Commenters were concerned that the terminology would lead to confusion

regarding the required documentation of eligibility for the different

types of sites, especially in the case of the term ``open enrolled

site.''

The proposed rule defined an ``open site'' as ``a site at which

meals are made available to all children in the area and which is

located in an area in which at least 50 percent of the children are

from households that would be eligible for free or reduced price school

meals under the National School Lunch Program and the School Breakfast

Program, as determined in accordance with paragraph (a) of the

definition of Areas in which poor economic conditions exist.'' Open

sites document their eligibility on the basis of area data showing that

at least 50 percent of the children from the area are from households

with incomes at or below 185 percent of poverty.

An ``open enrolled site'' was defined as ``an enrolled site which

is initially open to broad community participation, but at which the

sponsor limits attendance for reasons of security, safety, or control.

Site eligibility for an open enrolled site shall be documented in

accordance with paragraph (a) of the definition of Areas in which poor

economic conditions exist.'' For an open enrolled site, site

eligibility is documented using area eligibility information, the same

way that eligibility is documented for an open site.

The proposed rule defined a closed enrolled site as ``a site which

is open only to enrolled children, as opposed to the community at

large, and in which at least 50 percent of the enrolled children at the

site are eligible for free or reduced-price school meals under the

National School Lunch Program and the School Breakfast Program, as

determined by approval of applications in accordance with

Sec. 225.15(f) of this part.'' Thus, in contrast to open and open

enrolled sites, a closed enrolled site documents its eligibility on the

basis of applications from individual children that are enrolled at the

site.

We agree with commenters that the term ``open enrolled site'' could

lead a reader to believe that the site's eligibility is linked to the

income eligibility of individual children rather than the overall

socioeconomic status of the area. Based on comments, we are changing

the term ``open enrolled site'' in this final rule to ``restricted open

site.'' (The wording of the definition remains the same.) We believe

``restricted open site'' more accurately conveys the way that these

sites must document eligibility. The definitions of ``open site,''

``closed enrolled site,'' and ``restricted open site'' are in

Sec. 225.2 of this final rule.

Site Eligibility Documentation

One commenter recommended allowing eligibility documentation for

open and open enrolled (now ``restricted open'') sites to be collected

every five years, instead of the three years set forth in the proposed

rule, because a site's economic status does not change significantly in

a five year time period. We agree that, in most cases, an area's

overall economic status does not change rapidly. However, we are

retaining the three year cycle for determining a site as area eligible

when school data is used in Sec. 225.6(c)(3)(i)(B), as we believe this

timeframe provides the appropriate balance between paperwork reduction

and Program accountability.

Homeless Feeding Sites

The requirements for new sponsors and sponsors with significant

operational problems applying to participate in the Program at homeless

feeding sites were contained in Sec. 225.6(c)(2)(i)(L) of the proposed

rule. We did not receive any comments on the provisions relating to

homeless feeding sites. However, minor changes have been made to the

requirements for homeless feeding sites, since these sites are no

longer eligible to participate in SFSP solely on the basis of being

homeless sites. Section 107(j)(2)(A) of the Child Nutrition

Reauthorization Act of 1998 (Pub. L. 105-336) amended Section

13(a)(3)(C) of the NSLA (42 U.S.C. 1761 (a)(3)(C)) to remove the

special eligibility provisions for homeless feeding sites in SFSP, and

authorized their participation in the Child and Adult Care Food

Program, effective July 1, 1999. To continue to participate in SFSP,

homeless sites must qualify as open or enrolled sites. Therefore, this

final rule removes the requirement in proposed Sec. 225.6(c)(2)(i)(L)

that site information sheets for homeless sites contain certification

that the site's primary purpose is to provide shelter and one or more

meal services per day to homeless families, since this information is

no longer necessary in determining a homeless site's eligibility to

participate in SFSP.

Budgets

One commenter stated that experienced sponsors should not be

required to continue to submit administrative budgets to the State

agency, as these budgets are not an accurate indicator of what a

sponsor needs to financially administer the Program because sponsors

tend to add and drop sites during the course of the year. The commenter

also stated that experienced sponsors usually have a good understanding

of the ``lesser of cost versus rate'' concept and can effectively use

this to project their finances for the Program. According to

[[Page 72893]]

the April 14, 1994, FNS instruction, 796-4, Revision 4, the ``lesser of

cost versus rate'' concept means payments made to SFSP sponsors for

their operating costs should equal the lesser of: (1) the actual

operating costs incurred by the sponsor, or (2) the sum of the amounts

derived by multiplying the number of meals, by type, that are served to

participating children at the current reimbursement rates. This concept

is also outlined in Sec. 225.9(d)(6)(i) and (ii) of the SFSP

regulations.

As mentioned in the proposed rule, updating and submitting

administrative and operating budgets to the State agency is an

important process as it ensures that Federal funds are properly spent.

Additionally, this process helps sponsors determine whether their

planned expenditures will be adequately funded under the SFSP's

``lesser of costs versus rates'' funding formula. We continue to

believe this is important information to be submitted on an annual

basis to the State agency. Therefore, we are retaining the requirement

for experienced sponsors in Sec. 225.6(c)(3)(ii)(B). (The requirement

is found in Sec. 225.6(c)(2)(ii)(B) of this final rule for new sponsors

and sponsors with significant operational problems.)

Other Comments/Summary of Provisions

We did not receive any comments on the remaining provisions of the

proposed rule on sponsor and site application requirements. The

following chart outlines the sponsor and site application requirements

for new sponsors/sponsors with significant operational problems, and

for experienced sponsors. Changes based on public comments received, as

discussed above, have been incorporated in the final rule.

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New sponsors/

sites and

sponsors/sites Experienced sponsors/

Requirement with significant sites

operational

problems

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Site Information Sheet:

Organized and supervised Sec. 225.6(c)(2) N/A.

system for serving meals (i)(A).

to children.

Estimated number and types Sec. 225.6(c)(2) Sec. 225.6(c)(3)(i)(

of meals to be served and (i)(B). A).

times of service.

Arrangements for delivery Sec. 225.6(c)(2) N/A.

and holding of meals and (i)(C).

storing leftovers for

next day meal service.

Arrangements for food Sec. 225.6(c)(2) N/A.

service during periods of (i)(D).

inclement weather.

Access to means of Sec. 225.6(c)(2) N/A.

communication for making (i)(E).

necessary adjustments for

number of meals to be

served at each site.

Whether the site is rural Sec. 225.6(c)(2) N/A.

or non-rural and whether (i)(F).

the site's food service

will be self-prepared or

vended.

Open sites and restricted open Sec. 225.6(c)(2) Sec. 225.6(c)(3)(i)(

sites: documentation (i)(G). B). Documentation

supporting area eligibility must be submitted

determination. every three years if

school data is used,

or earlier if

requested by the

State agency. If

census data is used,

documentation must

be submitted when

new census data

becomes available.

Closed enrolled sites: the Sec. 225.6(c)(2) Sec. 225.6(c)(3)(i)(

projected number of children (i)(H). C).

enrolled and projected number

of children eligible for f/rp

meals for each site.

NYSP sites: certification from Sec. 225.6(c)(2) N/A.

sponsor that all children who (i)(I).

will receive SFSP meals are

enrolled participants in NYSP.

Camps: number of children Sec. 225.6(c)(2) Sec. 225.6(c)(3)(i)(

enrolled in each session who (i)(J). D).

meet Program income standards.

Migrant sites: certification Sec. 225.6(c)(2) N/A.

from migrant organization (i)(K).

that site serves children of

migrant worker families. If

site also serves non-migrant

children, sponsor must

certify that the site

primarily serves migrant

children.

Homeless feeding sites: Sec. 225.6(c)(2) N/A.

information that demonstrates (i)(L).

that site is not a

residential child care

institution; description of

method used to ensure that no

cash payments or other in-

kind services are used for

meal service; certification

that site only claims meals

served to children.

Other Application

Requirements:

Information that Sec. 225.6(c)(2) Sec. 225.6(c)(3)(ii)

demonstrates that (ii)(A). (A).

applicant meets

requirements in Sec.

225.14; extent of Program

payments needed including

advance and start-up

payments (if applicable);

staffing and monitoring

plan.

Complete administrative Sec. 225.6(c)(2) Sec. 225.6(c)(3)(ii)

and operating budget (ii)(B). (B).

which includes projected

administrative expenses

and information of how

sponsor will operate the

Program within estimated

reimbursement.

[[Page 72894]]

Summary of how meals will Sec. 225.6(c)(2) Sec. 225.6(c)(3)(ii)

be obtained; if (ii)(C). (C). If IFB is

invitation for bid is required, sponsors

required, sponsors must must submit schedule

submit a schedule for bid for bid dates and

dates and a copy of their copy of IFB if a

IFB. change has occurred

from previous year.

If method for

procuring meals has

changed from

previous year,

sponsors must submit

a summary of how

meals will be

obtained.

For sponsors seeking Sec. 225.6(c)(2) N/A.

approval as unit of (ii)(D).

local, municipal, county

or State government,

certification that it

will directly operate the

Program in accordance

with Sec. 225.14(d)(3).

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C. Targeted State Monitoring

General Discussion

State agency monitoring of SFSP sponsors and sites is critically

important as it serves as a tool for effective Program management and

ensures that quality meals are being served to eligible children.

However, we believe that the current State agency monitoring

requirements do not always allow State agencies enough flexibility to

determine where to focus their monitoring resources. Provisions in the

proposed rule allowed State agencies to target their review efforts to

new sponsors and those sponsors determined by the State agency to need

follow-up monitoring. In response to public comments, this final rule

revises some of the monitoring requirements contained in the proposed

rule to allow State agencies to more effectively focus their monitoring

efforts on those sponsors/sites which are new, operationally deficient,

or demonstrate the greatest potential to be deficient in their

operations.

Proposed Rule Provisions

Pre-approval Visits

The proposed rule retained the current provisions, found in

Sec. 225.7(d)(1)(i) and (ii), for State agencies to conduct pre-

approval visits of sponsors. These provisions require State agencies

to:

Conduct pre-approval visits for all applicant sponsors

which did not participate in the Program in the prior year;

Conduct optional pre-approval visits for new applicant

school food authority sponsors which have been reviewed by the State

agency under the NSLP during the preceding 12 months and had no

significant deficiencies; and

Conduct pre-approval visits for sponsors identified by the

State agency as needing pre-operational visits as a result of

operational problems in the prior year.

The proposed rule removed the specific requirements for State

agencies to conduct pre-approval visits for certain large sites and

sites operated by private nonprofit sponsors, and made all State agency

pre-approval visits to sites discretionary. This provision was

contained in Sec. 225.7(d)(1)(iii) of the proposed rule.

Sponsor and Site Reviews

The proposed rule required that, at any time during the Program

year, State agencies were required to conduct annual reviews of sponsor

operations and review at least 10 percent of the sponsor's sites or one

site, whichever number was greater, for:

Every new sponsor at least once during its first year of

operation;

Every sponsor which, in the determination of the State

agency, experienced significant problems in the prior year; and

Every sponsor with 20 or more sites.

Under the proposed rule, all sponsors were to be reviewed at least

once every 3 years. In addition, sponsors with large sites, larger

numbers of sites, or significant operational problems in the prior year

were required to be reviewed earlier. The recommendation was also made

that State agencies prioritize their review efforts to target all other

sponsors which increase their total number of sites by five or more, or

whose participation increased substantially, from one year to the next.

Finally, the proposed rule eliminated the special requirements for

State agency review of private nonprofit organizations found in

Sec. 225.7(d)(2)(i)(A), and removed the review requirement for

academic-year NYSP sites, since the NSLA no longer authorizes these

sites to participate in SFSP.

As indicated in the preamble of the proposed rule, the proposed

changes were not intended to result in a reduction in a State agency's

monitoring efforts. Rather, it was intended that the State agency's

monitoring resources would become more targeted to reviews of new

sponsors and sponsors of over 20 sites, and other sponsors that the

State agency identifies, and that a correspondingly greater amount of

State agency time and effort could be spent in conducting such reviews.

We expected each State's level of resources devoted to SFSP monitoring

to remain the same.

Comments Received and Final Rule Provisions

We received 3 comments pertaining to sponsor and site reviews. One

commenter suggested removing the reference to having State agencies

target sponsors that have increased their sites by 5 or more,

indicating that recommendations such as this are better placed in

guidance material. Two commenters expressed concern that the net result

of the proposed monitoring requirements could result in significant

reductions in the monitoring efforts put forth by State agencies.

As a result of these comments, we are revising the State agency

monitoring requirements in this final rule. We are removing the

proposed requirements that the State agency annually review every

sponsor with 20 or more sites, and that State agencies prioritize their

review efforts to target all other sponsors which increase their total

number of sites by five or more, or whose participation increases

substantially, from one year to the next.

Instead, State agencies will be required to annually review a

number of sponsors whose Program reimbursements, in the aggregate,

accounted for at least one-half of the total Program meal

reimbursements in the State in the prior year. We believe that the

three-year review cycle, coupled with the elimination of the current

detailed and prescriptive review requirements, will provide State

agencies the flexibility they need to properly oversee Program

operations. The requirement to annually review sponsors with claims

totaling one-half of Program reimbursements in the prior year ensure

that State agencies focus on the largest sponsors. To improve Program

management, we are

[[Page 72895]]

considering similar changes in the State agency monitoring requirements

for the Child and Adult Care Food Program.

Accordingly, under this final rule, State agencies are required to

conduct annual reviews of sponsor operations and review at least 10

percent of the sponsor's sites or one site, whichever number is

greater, for:

Every new sponsor at least once during its first year of

operation;

Every sponsor which, in the determination of the State

agency, experienced significant problems in the prior year; and

A number of sponsors whose Program reimbursements, in the

aggregate, accounted for at least one-half of the total Program meal

reimbursements in the State in the prior year.

In addition, State agencies must review every sponsor at least once

every 3 years. Sponsors with large numbers of sites, or a site(s) with

a large number of children attending, should be reviewed earlier. These

provisions are contained in Sec. 225.7(d)(2) of this final rule.

D. Procedural Matters

Executive Order 12866

This final rule has been determined to be not significant for

purposes of Executive Order 12866, and therefore has not been reviewed

by the Office of Management and Budget.

Public Law 104-4

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.

L. 104-4, requires Federal agencies to assess the effects of their

regulatory actions on State, local, and tribal governments and the

private sector. Under section 202 of the UMRA, the Food and Nutrition

Service generally must prepare a written statement, including a cost-

benefit analysis, for proposed and final rules with Federal mandates

that may result in expenditures to State, local, or tribal governments,

in the aggregate, or to the private sector, of $100 million or more in

any one year. When such a statement is needed for a rule, section 205

of the UMRA generally requires the Food and Nutrition Service to

identify and consider a reasonable number of regulatory alternatives

and adopt the least costly, more cost-effective or least burdensome

alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local and tribal

governments or the private sector of $100 million or more in any one

year. Thus, this rule is not subject to the requirements of sections

202 and 205 of the UMRA.

Executive Order 12372

The Summer Food Service Program is listed in the Catalog of Federal

Domestic Assistance under No. 10.559. For the reasons set forth in the

final rule in 7 CFR part 3015, subpart V, and related notices (48 FR

29114 and 49 FR 2276), this program is included in the scope of

Executive Order 12372, which requires intergovernmental consultation

with State and local officials.

Regulatory Flexibility Act

This final rule has been reviewed with regard to the requirements

of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Samuel

Chambers, Jr., Administrator of the Food and Nutrition Service (FNS),

has certified that this rule will not have a significant economic

impact on a substantial number of small entities. Simplifying and

streamlining the administration of the SFSP is the intended effect of

this rule when implemented.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. This rule is intended to have preemptive effect

with respect to any State or local laws, regulations or policies which

conflict with its provisions or which would otherwise impede its full

implementation. This rule is not intended to have retroactive effect

unless so specified in the ``Dates'' section of the preamble of the

rule. Prior to any judicial challenge to the provisions of this rule or

the applications of its provisions, all applicable administrative

procedures must be exhausted. This includes any administrative

procedures available through State or local governments. SFSP

administrative procedures are set forth at: (1) 7 CFR 225.13, which

outlines appeals procedures for use by a sponsor or a food service

management company; and (2) 7 CFR 225.17 and 7 CFR part 3015, which

address administrative appeal procedures for disputes involving

procurement by State agencies and sponsors.

Paperwork Reduction Act

This final rule seeks to reduce the reporting and recordkeeping

requirements for State agencies administering the SFSP. In accordance

with the Paperwork Reduction Act of 1995, 44 U.S.C. 3507, the reporting

requirements included in this final rule were reviewed by the Office of

Management and Budget (OMB). OMB approved these requirements for 7 CFR

Part 225 under OMB number 0584-0280.

List of Subjects in 7 CFR Part 225

Food and Nutrition Service, Food assistance programs, Grant

programs-health, Infants and children, Labeling, Reporting and

recordkeeping requirements.

Accordingly, 7 CFR part 225 is amended as follows:

PART 225--SUMMER FOOD SERVICE PROGRAM

1. The authority citation for part 225 continues to read as

follows:

Authority: Secs. 9, 13 and 14, National School Lunch Act, as

amended (42 U.S.C. 1758, 1761, and 1762a).

2. In Sec. 225.2:

a. New definitions of Closed enrolled site, Experienced site,

Experienced sponsor, New site, New sponsor, Open site, and Restricted

open site are added in alphabetical order; and

b. The definition of Areas in which poor economic conditions exist

is revised. The additions and revision read as follows:

Sec. 225.2 Definitions.

* * * * *

Areas in which poor economic conditions exist means:

(a) The local areas from which an open site and restricted open

site draw their attendance in which at least 50 percent of the children

are eligible for free or reduced-price school meals under the National

School Lunch Program and the School Breakfast Program, as determined:

(1) By information provided from departments of welfare and

education, zoning commissions, census tracts, and organizations

determined by the State agency to be migrant organizations;

(2) By the number of free and reduced-price lunches or breakfasts

served to children attending public and nonprofit private schools

located in the areas of Program sites; or

(3) From other appropriate sources; or

(b) A closed enrolled site.

* * * * *

Closed enrolled site means a site which is open only to enrolled

children, as opposed to the community at large, and in which at least

50 percent of the enrolled children at the site are eligible for free

or reduced price school meals under the National School Lunch Program

and the School Breakfast Program, as determined by approval of

applications in accordance with Sec. 225.15(f).

* * * * *

[[Page 72896]]

Experienced site means a site which, as determined by the State

agency, has successfully participated in the Program in the prior year.

Experienced sponsor means a sponsor which, as determined by the

State agency, has successfully participated in the Program in the prior

year.

* * * * *

New site means a site which did not participate in the Program in

the prior year, or, as determined by the State agency, a site which has

experienced significant staff turnover from the prior year.

New sponsor means a sponsor which did not participate in the

Program in the prior year, or, as determined by the State agency, a

sponsor which has experienced significant staff turnover from the prior

year.

* * * * *

Open site means a site at which meals are made available to all

children in the area and which is located in an area in which at least

50 percent of the children are from households that would be eligible

for free or reduced price school meals under the National School Lunch

Program and the School Breakfast Program, as determined in accordance

with paragraph (a) of the definition of Areas in which poor economic

conditions exist.

* * * * *

Restricted open site means a site which is initially open to broad

community participation, but at which the sponsor restricts or limits

attendance for reasons of security, safety or control. Site eligibility

for a restricted open site shall be documented in accordance with

paragraph (a) of the definition of Areas in which poor economic

conditions exist.

* * * * *

3. In Sec. 225.6:

a. Paragraph (b)(1) is amended by adding a new sentence at the end;

b. Paragraph (b)(4) is revised;

c. Paragraph (c)(1) is revised;

d. Paragraph (c)(2) is revised;

e. Paragraphs (c)(3) and (c)(4) are redesignated as paragraphs

(c)(4) and (c)(5), respectively, and a new paragraph (c)(3) is added;

f. Newly redesignated paragraph (c)(4) is amended by adding a

heading and by removing paragraph (c)(4) introductory text and adding

it as the first sentence in newly redesignated paragraph (c)(4)(i); the

paragraph is further amended by removing the reference to ``(c)(4)'' in

paragraph (c)(4)(ii)(D) and adding in its place a reference to

``(c)(5)''.

g. Newly redesignated paragraph (c)(5) is amended by adding a

heading;

h. Paragraph (d)(1)(ii) is amended by removing the word ``and'' at

the end of the paragraph;

i. Paragraph (d)(1)(iii) is amended by removing the period at the

end of the paragraph and adding in its place the word ``; and'';

j. A new paragraph (d)(1)(iv) is added; and

k. Paragraph (e)(1) is revised.

The additions and revisions read as follows:

Sec. 225.6 State agency responsibilities.

* * * * *

(b) * * *

(1) * * * Sponsors applying for participation in the Program due to

an unanticipated school closure during the period from October through

April (or at any time of the year in an area with a continuous school

calendar) shall be exempt from the application submission deadline.

* * * * *

(4) The State agency shall determine the eligibility of sponsors

applying for participation in the Program in accordance with the

applicant sponsor eligibility criteria outlined in Sec. 225.14.

However, State agencies may approve the application of an otherwise

eligible applicant sponsor which does not provide a year-round service

to the community which it proposes to serve under the Program only if

it meets one or more of the following criteria: It is a residential

camp; it proposes to provide a food service for the children of migrant

workers; a failure to do so would deny the Program to an area in which

poor economic conditions exist; a significant number of needy children

will not otherwise have reasonable access to the Program; or it

proposes to serve an area affected by an unanticipated school closure

during the period from October through April (or at any time of the

year in an area with a continuous school calendar). In addition, the

State agency may approve a sponsor for participation during an

unanticipated school closure without a prior application if the sponsor

participated in the program at any time during the current year or in

either of the prior two calendar years.

* * * * *

(1) Application forms. The applicant shall submit a written

application to the State agency for participation in the Program as a

sponsor. Sponsors proposing to serve an area affected by an

unanticipated school closure during the period from October through

April (or at any time of the year in an area with a continuous school

calendar) may be exempt, at the discretion of the State agency, from

submitting a new application if they have participated in the program

at any time during the current year or in either of the prior two

calendar years. The State agency may use the application form developed

by FNS, or it may develop an application form, for use in the Program.

Application shall be made on a timely basis in accordance with the

deadline date established under Sec. 225.6(b)(1).

(2) Requirements for new sponsors, new sites, and, as determined by

the State agency, sponsors and sites which have experienced significant

operational problems in the prior year.--(i) Site information sheets.

At a minimum, the application submitted by new sponsors and by sponsors

which, in the determination of the State agency, have experienced

significant operational problems in the prior year shall include a site

information sheet, as developed by the State agency, for each site

where a food service operation is proposed. The site information sheet

for new sponsors and new sites, and for sponsors and sites which, in

the determination of the State agency, have experienced significant

operational problems in the current year must demonstrate or describe

the following:

(A) An organized and supervised system for serving meals to

attending children;

(B) The estimated number and types of meals to be served and the

times of service;

health authorities, for delivery and holding of meals until time of

service, and arrangements for storing and refrigerating any leftover

meals until the next day;

(D) Arrangements for food service during periods of inclement

weather;

(E) Access to a means of communication for making necessary

adjustments in the number of meals delivered in accordance with the

number of children attending daily at each site;

(F) Whether the site is rural, as defined in Sec. 225.2, or non-

rural, and whether the site's food service will be self-prepared or

vended;

(G) For open sites and restricted open sites, documentation

supporting the eligibility of each site as serving an area in which

poor economic conditions exist. However, for sites that a sponsor

proposes to serve during an unanticipated school closure during the

period from October through April (or at any time of the year in an

area with a continuous school calendar), any site which has

participated in the Program

[[Page 72897]]

at any time during the current year or in either of the prior two

calendar years shall be considered eligible without new documentation;

(H) For closed enrolled sites, the projected number of children

enrolled and the projected number of children eligible for free and

reduced price meals for each of these sites;

(I) For NYSP sites, certification from the sponsor that all of the

children who will receive Program meals are enrolled participants in

the NYSP;

(J) For camps, the number of children enrolled in each session who

meet the Program's income standards. If such information is not

available at the time of application, it shall be submitted as soon as

possible thereafter and in no case later than the filing of the camp's

claim for reimbursement for each session;

(K) For those sites at which applicants will serve children of

migrant workers, certification from a migrant organization which

attests that the site serves children of migrant worker families. If

the site also serves non-migrant children, the sponsor shall certify

that the site predominantly serves migrant children; and

(L) For a site that serves homeless children, information

sufficient to demonstrate that the site is not a residential child care

institution, as defined in paragraph (c) of the definition of school in

Sec. 210.2 of this chapter. If cash payments, food stamps, or any in-

kind service are required of any meal recipient at these sites,

sponsors must describe the method(s) used to ensure that no such

payments or services are received for any Program meal served to

children. In addition, sponsors must certify that such sites employ

meal counting methods which ensure that reimbursement is claimed only

for meals served to children.

(ii) Other application requirements. New sponsors and sponsors

which in the determination of the State agency have experienced

significant operational problems in the prior year shall also include

in their applications:

(A) Information in sufficient detail to enable the State agency to

determine whether the applicant meets the criteria for participation in

the Program as set forth in Sec. 225.14; the extent of Program payments

needed, including a request for advance payments and start-up payments,

if applicable; and a staffing and monitoring plan;

(B) A complete administrative and operating budget for State agency

review and approval. The administrative budget shall contain the

projected administrative expenses which a sponsor expects to incur

during the operation of the Program, and shall include information in

sufficient detail to enable the State agency to assess the sponsor's

ability to operate the Program within its estimated reimbursement. A

sponsor's approved administrative budget shall be subject to subsequent

review by the State agency for adjustments in projected administrative

costs;

each site, self-prepared and distributed from a central kitchen,

purchased from a school food authority, competitively procured from a

food service management company, etc.). If an invitation for bid is

required under Sec. 225.15(g), sponsors shall also submit a schedule

for bid dates, and a copy of their invitation for bid; and

(D) For each applicant which seeks approval under Sec. 225.14(b)(3)

as a unit of local, municipal, county or State government, or under

Sec. 225.14(b)(5) as a private nonprofit organization, certification

that it will directly operate the Program in accordance with

Sec. 225.14(d)(3).

(3) Requirements for experienced sponsors and experienced sites.--

(i) Site information sheets. At a minimum, the application submitted by

experienced sponsors shall include a site information sheet, as

developed by the State agency, for each site where a food service

operation is proposed. The site information sheet for experienced

sponsors and experienced sites must demonstrate or describe the

information below. The State agency also may require experienced

sponsors and experienced sites to provide any of the information

required in paragraph (c)(2) of this section.

(A) The estimated number and types of meals to be served and the

times of service;

(B) For open sites and restricted open sites, new documentation

supporting the eligibility of each site as serving an area in which

poor economic conditions exist shall be submitted. Such documentation

shall be submitted every three years when school data are used. When

census data are used, such documentation shall be submitted when new

census data are available, or earlier if the State agency believes that

an area's socioeconomic status has changed significantly since the last

census. For sites that a sponsor proposes to serve during an

unanticipated school closure during the period from October through

April (or at any time of the year in an area with a continuous school

calendar), any site which has participated in the Program at any time

during the current year or in either of the prior two calendar years

shall be considered eligible without new documentation of serving an

area in which poor economic conditions exist;

enrolled and the projected number of children eligible for free and

reduced price school meals for each of these sites; and

(D) For camps, the number of children enrolled in each session who

meet the Program's income standards. If such information is not

available at the time of application, it shall be submitted as soon as

possible thereafter and in no case later than the filing of the camp's

claim for reimbursement for each session.

(ii) Other application requirements. Experienced sponsors shall

also include on their applications:

(A) The extent of Program payments needed, including a request for

advance payments and start-up payments, if applicable, and a staffing

and monitoring plan;