Provision 2

1. Provision 2 A Special Assistance Alternative

2. Overview • Congress incorporated into Section 11(a)(1) of the Richard B. Russell National School Lunch Act (42 USC 1759a) three alternative Provisions. • Provisions help reduce paperwork and administrative burden • Federal Regulations found in 7 CFR 245 • Provision 2 Guidance on http://fns.usda.gov

3. Provision 2 Overview • Meals provided to ALL students at no charge for 4 consecutive years (including base year) • No maximum or minimum requirement for the percentage of free and reduced eligible • Only take applications in the base-year (1st year) • Schools must make up the difference between Federal reimbursement and costs using non-Federal funds.

4. Provision 2 Overview • Schools must first receive LEA and State agency approval before starting Provision 2 • Schools exhibit reasonable accuracy in determining the eligibility status of students • Accurately counts meals, by type, at POS • Accurately report/claim meals for reimbursement • Schools may return to standard meal counting procedures at any time with State Agency approval and amend agreement with State agency • 4-year extensions may be granted with approved socioeconomic data

5. Reduce Administrative Burden • Reduce administrative burden for SFAs • No applications, determination, verifications after the base year • No cashiers – though reimbursable meal counts are still required • Reduce paperwork for families • Reduces perception of stigma for students receiving free and reduced-price meals • Increases participation.

6. Feasibility – Is Provision 2 a Good Fit? • Provision 2 can be a great alternative to an entire school district or a single school within a district. Factors to consider in the evaluation process: • Current participation & Potential for increased participation • Percent distribution of free and reduced-price eligible students • Cost effectiveness of the operation & cost reduction of administrative burdens • Possible quicker lines, less stigma for F&RP students, philosophy of administration

7. Feasibility – Is Provision 2 a Good Fit? Financial Feasibility: • Since Provision 2 is non-pricing, how much revenue will be gained from increased participation? • How much revenue will be lost from loss of paid-meals and reduced-price co-payments? • What will be the cost if paid or reduced-price participation increases? • Can labor be decreased or diverted to other duties? • Labor may be decreased in processing eligibility applications and conducting verification, count meals by eligibility category, collect money for paid and reduced-price meals, etc.,

8. Feasibility – Is Provision 2 a Good Fit? For which schools and which programs will Provision 2 work best? • SFA-wide for breakfast and lunch • SFA-wide for only lunch or only breakfast • In selected schools for breakfast and lunch • In selected schools for breakfast OR lunch only

9. The Base Year • Base-year is the 1st of 4 years on Provision 2 • All standard meal application procedures are followed • Media release & Letter to household required (indicating all students will eat free but the need for applications to be returned) • Applications collected and eligibility determinations made (including direct certification) – Notifications sent to family • Verification is conducted, summary report still required • Counting and claiming meals by eligibility type at POS • But all students eat for free!

10. Delayed Implementation • Schools must receive State agency approval • Schools may charge students eligible for reduced-price and paid meals in the first claiming period of the base year • Meal counts for ten days or less in one month may be combined with the following month for the claim for reimbursement (as first claiming period) • Thirty day carryover of eligibility from the prior year may be reduced (i.e. to 10 days) so students will pay for meals sooner and submit eligibility applications • Delayed implementation schools will use annual-claiming percentage in non-base years.

11. Base Year – Claiming Percentages • Percentages of free, reduced-price, and paid meals served during the base year are calculated at the end of the year to claim meals in non-base years • Claiming percentages represent the ratio of each meal category (free, reduced price, or paid) to the total reimbursable lunches and/or breakfasts served • Lunch percentages are calculated separately from breakfast percentages and applied separately in non-base years • Claiming percentages can be calculated for each Provision 2 school, a group of Provision 2 schools, or SFA-wide (2004 USDA Memo)

12. Base Year – Claiming Percentages • Monthly claiming percentages in the base year may be applied to corresponding months in non-base years • E.g., The base-year’s January percentages of Free, Reduced, Paid students would be applied to January of non-base year claims • Each month of the base-year will have a different F&RP claiming percentage • Annual base-year claiming percentages can be applied to each month of non-base years • Annual percentages are calculated using total lunches by each category; it is not an average of monthly percentages • Carry the calculation to a minimum of two decimal places before rounding (e.g., 86.15%). Then round the percentages to one decimal place using standard rounding; (e.g., 86.15% = 86.2%)

13. Non-Base Years • Non-base years are Years 2, 3, and 4 of the 4 Years cycle (and all consecutive extensions) • Public release is still required, but simplified version is acceptable • Site monitoring remains in effect • October reporting remains (with adjustments) • Schools do not distribute/collect applications or conduct direct certifications or verifications • Except if the school chooses to do so in Year 4 for the purpose of an extension • No applications for new students • Exceptions for schools that only operate Provision 2 for lunch or breakfast but not both

14. Non-Base Years – Meal Counts • Take total daily reimbursable meal counts (not by F&RP) at POS • Add total daily meal counts at end of claiming period to determine total meals for claiming • Multiply total meal count by the free, reduced-price, and paid percentages computed during the same month of the base year (or use annual percentages) • Submit meal counts by category after percentages applied

15. Non-Base Years – Meal Counts Example: • Base Year (2012) Free, Reduced, Paid Annual Percentages: • Free = 70.3%, Reduced = 20.8%, Paid = 8.9% • Non-base Year (2013) claim month of November • Total meal counts for Nov-2013 claim period = 2,000 • Free meal count = 2,000 * 0.703 = 1406 • Reduced-Price count = 2,000 * .208 = 416 • Paid meal count = 2,000 * .089 = 178 • Edit check: 1406 + 416 + 178 = 2000

16. Claims Review Process • Conduct daily meal count edit checks using total enrollment (do not use free, reduced-price and paid eligible) • First, determine the total number of students with access to the lunch program, as of the last serving day in October. • You may also use the highest number of students enrolled during the month for internal control purposes • Apply an attendance factor to enrollment to determine the average daily attendance for your Provision 2 school • Each day's total student meal count is compared to the attendance-adjusted enrollment • If the comparison shows more total meals claimed than attendance-adjusted enrollment, you need to follow-up to determine the cause prior to submitting the Claim for Reimbursement to your State agency

17. Changes that Arise • When the attendance area for a Provision 2 school changes the school must reestablish their base-year • Adding new standard school with changing attendance area • Splitting one school to two schools with boundary changes • If two Provision 2 schools merge but there is no change in total attendance area then a sum total base year count by category can be used to determine claiming percentages • SFA-wide or grouped percentages have exemptions • See USDA Provision 2 Guidance Manual Questions and Answers

18. End of Provision 2 Cycle: • Revert back to standard meal claiming • Apply for an extension • Schools will continue to use base-year claiming percentages • Extensions are granted for a 4-year cycle for • School will Continue using their base year percentages • Apply for a new base year • Regular • Streamlined (New applications required in both cases)

19. Applying for an Extension Establish the school’s income level, adjusted for inflation, has remained stable, declined, or had negligible improvement • Negligible improvement – 5% or less • Use pre-approved site-specific equivalent socioeconomic data from base year and last year of current cycle (see extension request). • Source of data must remain consistent between base-year and last year before extension • See USDA Provision 2 Guidance for example to calculate percentage change.

20. Socioeconomic Data • Socioeconomic data is the approved source you identified to the State agency on the Free and Reduced Price Policy Statement during the most recent base year • The socioeconomic data used must be equivalent for the most recent base year and the last year, or the year you are requesting the extension, of your current Provision 2 cycle • Data should be reflective of the school’s population • It should effectively measure whether the income level of the school’s population (adjusted for inflation) has remained stable, declined or had only negligible improvement. • Provided that the above criteria are met, pre-approved sources of socioeconomic data include: • City or county zoning and economic planning office data; • Approved unemployment data; • Local SNAP or TANF certification data including direct certification; • Food Distribution Program on Indian Reservations data;

21. Streamlined Base Year Schools can apply for Streamlined Base Year if: • Complete a minimum of one Provision 2 cycle • Request and fail to get approval for an extension • Serve meals non-pricing • May use enrollment based or participation based base year • If participation based, must have system to accurately count total meals by eligibility

22. Streamlined Base Year School determines program eligibility for a statistically valid sample of either: • All enrolled students with access to the applicable meal program as of October 31 or another date approved by the State (enrollment based) OR • Enrolled students participating in the applicable meal program (participation based)

23. Streamlined Base Year • Statistically Valid Sample: • Pool of students limited to enrolled students with access to meal program • Students must be randomly selected from the sample frame (large enough to be significantly valid) • Response rate to survey must be at least 80 percent\ • See USDA Provision 2 Guidance Manual for details.

24. Record Retention • Must maintain base year applications/records through entire Provision 2 cycle (and all extensions) – plus 3 years • Base year records include: • All approved and denied free and reduced price applications; Direct certification data; • Changes in eligibility status as a result of verification and other reasons; • Daily meal counts, by type & Calculation of claiming percentages; • Attendance areas of each school participating in Provision 2; • Socioeconomic data that will be used as the base year data if an extension is granted; • Any extension authorizations from the State agency; • Edit check and on-site review documentation; • Verification records; and • Claims for Reimbursement • Retain records longer if school has audit findings and until audit findings are resolved

25. Keep Your Records • Rosters must be kept by month by school • Maintain base year socioeconomic data used to request extensions throughout the Provision cycle(s) (maintain same base year even with multiple extensions) • Must retain approved Agreement and Policy Statement with the State Agency • If the State agency determines the school has not maintained the required base year records the State agency would require the school to return to standard application and meal counting procedures or reestablish a base-year