PROVISION 2

A Special Assistance Alternative

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

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.

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

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.

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 participationPercent distribution of free and reduced-price eligible

studentsCost effectiveness of the operation & cost reduction of

administrative burdensPossible quicker lines, less stigma for F&RP students,

philosophy of administration

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.,

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

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!

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.

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)

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%)

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

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

NON-BASE YEARS – MEAL COUNTSExample: Base Year (2012) Free, Reduced, Paid Annual

Percentages: Free = 70.3%, Reduced = 20.8%, Paid = 8.9%

Non-base Year (2013) claim month of NovemberTotal meal counts for Nov-2013 claim period = 2,000Free meal count = 2,000 * 0.703 = 1406Reduced-Price count = 2,000 * .208 = 416Paid meal count = 2,000 * .089 = 178Edit check: 1406 + 416 + 178 = 2000

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

CHANGES THAT ARISE When the attendance area for a Provision 2 school

changes the school must reestablish their base-yearAdding new standard school with changing attendance

areaSplitting 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

END OF PROVISION 2 CYCLE:Revert back to standard meal claimingApply for an extensionSchools will continue to use base-year claiming

percentagesExtensions are granted for a 4-year cycle forSchool will Continue using their base year percentages Apply for a new base yearRegularStreamlined

(New applications required in both cases)

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 lessUse 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 extensionSee USDA Provision 2 Guidance for example to

calculate percentage change.

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;

STREAMLINED BASE YEAR Schools can apply for Streamlined Base Year if:

Complete a minimum of one Provision 2 cycleRequest and fail to get approval for an extensionServe 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

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)

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.

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

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