The United States Department of Agriculture (USDA) has approved federal funding for Federal Fiscal Year 2022 in response to the unprecedented challenges in purchasing and receiving food. The funds are referred to as Supply Chain Assistance (SCA) funds. This memorandum is intended to explain the purpose and allowable usage of SCA funds as well as other helpful information.
SCA funds are intended to provide financial assistance to help address various challenges including unanticipated cancellation of food contracts, reduced availability of certain foods, unexpected substitution of certain products, and unpredictable increases in food and supply prices. SCA funds must be used exclusively to purchase unprocessed or minimally processed domestic food products.
All SFAs are required to maintain purchasing and other records for review and audit purposes. This documentation must reflect that purchases are consistent with the purpose of the SCA funding, i.e., for domestic unprocessed or minimally processed food products, in amounts that are at least equal to funds received. This may include invoices, receipts, and other documents provided at time of purchase.
The Massachusetts Department of Elementary and Secondary Education's (DESE) Office for Food and Nutrition Programs (FNP) allocated SCA funds to individual School Food Authorities (SFA) based on a predetermined formula, as described in guidance issued by USDA. This allocation included two components: a base payment of $5,000 to all eligible school districts, and a proportional funding amount based on each SFA's share of statewide student enrollment. DESE used the most recent SFA-level enrollment data available (i.e., reflective of October 2022) to calculate the additional funding.
If you have further questions regarding this payment, please contact Pete McLoughlin .
How will the payment transaction be identified in Payment Details?
The payment transaction will be a Manual Adjustment and identified as "Supply Chain Assistance Funds."
What are some examples of allowable products that SFAs may procure using their Supply Chain Assistance (SCA) funds?
SCA funds must be used exclusively for the purchase of domestic1 food products (also known as commodities) that are unprocessed or minimally processed. Examples of some allowable food products include fluid milk and other dairy foods such as cheese and yogurt; fruits and vegetables (including 100% juices); grain products such as pastas and rice; meats (whole, pieces, or food items such as ground meats); and meat alternates such as beans or legumes. Foods in a wide variety of minimal processing states (e.g., whole, cut, pureed, etc.) and/or forms (e.g., fresh, frozen, canned, dried, etc.) are allowable.
The steps SFAs must take to ensure the domesticity of food products purchased with SCA funds is consistent with the measures taken for all other purchases in the school meal programs (per existing Buy American requirements). The difference is that the limited exceptions provided under the NSLP Buy American provision may not be used since all products must be domestic. In addition, as with all Federal funds, SFAs are required to follow Federal procurement regulations found in 2 CFR 200, which includes the option to utilize emergency noncompetitive procurements.
What are some examples of food products that are not permitted to be purchased using SCA funds?
Foods that are generally understood to be significantly processed or prepared may not be purchased using SCA funds. For example, crushed tomatoes, shredded cheese, whole- wheat flour, and sliced vegetables are all food items that are individually allowable, but a pre-made pizza comprised of those ingredients would not be allowable. Other examples of unallowable products include baked goods such as breads, muffins, or crackers; pre- packaged sandwiches or meals; or other prepared and/or pre-cooked items such as chicken nuggets, that come ready-to-eat or that require no further preparation beyond heating. Non-domestic food products cannot be purchased with SCA funds.
May SFAs use any portion of their SCA funds allocation for labor, supplies or administrative expenses?
No. SCA funds may only be used for purchases of unprocessed or minimally processed domestic food products for use in school meal programs.
Are non-food costs that are essential to the procurement of unprocessed or minimally processed domestic food products allowable when using SCA funds?
Yes. Incidental costs (such as those related to shipping and handling or packaging) that are a part of the normal or customary purchase price charged by a vendor for any given food product are an allowable use of SCA funds.
Is there any requirement that the SCA funds for the purchases of unprocessed or minimally processed be limited to local foods?
No. SFAs are not required to purchase locally grown, raised, or caught foods with SCA funds. SFAs are encouraged to procure local1 foods whenever feasible, and SCA funds may help make purchasing from local producers an excellent option for addressing unexpected supply chain disruptions.
For which Child Nutrition Programs may SCA funds be used to support the service of meals and snacks?
SCA funds are available only to SFAs operating the NSLP and/or SBP and may only be used by SFAs to purchase unprocessed or minimally processed domestic food products for those programs. This includes the NSLP Seamless Summer Option (SSO) and NSLP Afterschool Snacks, as these are components of the NSLP.
As such, if an SFA operating NSLP and/or SBP operates other Child Nutrition Programs (i.e. the Special Milk Program, the Fresh Fruit and Vegetable Program, the Summer Food Service Program, and/or the Child and Adult Care Food Program), SCA funds may not be used in conjunction with those programs (i.e. the SFA must limit the purchase and use of domestic food products to support only the NSLP/SBP meal service)
How were SCA Funds allocated?
The Massachusetts Department of Elementary and Secondary Education's (DESE) Office for Food and Nutrition Programs (FNP) allocated SCA funds to individual SFAs based on a predetermined formula, as described in guidance issued by USDA. This allocation includes two components: a base payment of $5,000 to all eligible school districts, and a proportional funding amount based on each SFA's share of statewide student enrollment. DESE used the most recent SFA-level enrollment data available (i.e., reflective of October 2022) to calculate the additional funding.
Must SCA funds be deposited in an SFA's Nonprofit Food Service Account (NPFSA)?
Yes. Regardless of the disbursement method employed by the State agency, SCA funds may only be deposited into the NPFSA of the SFA for which the funds were intended.
Once deposited into the NPFSA, how are SCA funds to be tracked by an SFA?
SFAs are required to maintain documentation supporting food purchases that are allowable for SCA purposes (i.e. unprocessed or minimally processed domestic food products) and equal in amount received, consistent with the regular program recordkeeping requirements. However, SCA funds deposited to the NPFSA do not need to be separated from other monies within the account and are not tracked separately from an accounting standpoint.
May SCA funds be used to cover the cost of past (i.e. retroactive) expenditures?
No. SCA funds may not be used to cover the cost of past expenditures and may only be used for current/future expenses. This may include new obligations, or bills on prior unpaid obligations that come due following the SFA's receipt of SCA funds.
An example of the latter would be an SFA that signed a purchasing contract for milk before the start of the school year that is paid for on a monthly basis. If SCA funds are received by the SFA on February 1, 2023, the SFA could pay invoices for milk that are due on or after that date.
What is the Catalog of Federal Domestic Assistance (CFDA) number for the SCA Funds?
The Catalog of Federal Domestic Assistance (CFDA) number for the SCA Funds is 10.555.
Will SCA funds be monitored as part of the school meal programs Administrative Review and/or FNS review processes?
Yes. SCA funds will be monitored consistent with other school meal program funds through the existing oversight measures used in the school meal programs Administrative Review. While State agencies will generally use the same mechanism to review these funds as they do the Buy American provision, all food products purchased with SCA funds must be domestic. Therefore, SFAs may not utilize the limited exceptions to the Buy American provision to purchase non-domestic food products when using SCA funds. In addition, use of funds may be subject to future external audit activity under any existing/standard auditing practices.
What records must SFAs retain in connection with their receipt and use of SCA funds?
All SFAs are required to maintain purchasing and other records for review and audit purposes. This documentation must reflect those purchases made by SFAs are consistent with the purpose of the SCA funding, i.e., for domestic unprocessed or minimally processed food products, in amounts that are at least equal to funds received. SFAs must retain regular records pertaining to its school food service as required by 7 CFR 210.9(b)(17). This may include invoices, receipts, and other documents provided when the SFA executes purchases with these funds. They must evidence that SCA funds were used for allowable purposes. SFAs are not required to proactively provide documentation to State agencies regarding those food purchases.
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1 "Domestic foods" are those grown and produced in the United States of America. "Local foods" are domestic foods, but specifically refer to foods that are grown within a certain proximity — as defined by the State or SFA — of the location where they will be consumed
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