United States Department of Agriculture

Food and Nutrition Service

Southeast Region

 

Policy Memorandum 250.48-01:  Policy Interpretation Regarding the Use and Sale of Commodities in School Food Authorities (SFAs)

 

This memorandum is a restatement of policy previously issued as Food Distribution Policy Memorandum 97-21 on September 23, 1997.  Any changes made to the original text are in bold.

 

In response to requests for clarification from a number of State agencies (SAs), we are revising the policy on the use and sale of commodities by SFAs.  Since many schools share preparation facilities with other entities, or perform catering operations, questions have been raised about the legitimate use of U.S. Department of Agriculture (USDA) commodities.

 

The newly clarified policy allows the SFAs to utilize commodities in the preparation and sale of food for any school related functions where the primary beneficiaries of the food are the students themselves.  Funds derived from the sale of these commodities must accrue to the nonprofit school food service account to be used solely to replace the commodities or to operate or improve the nonprofit school food service operation.  The issue at hand is not whether the foods containing commodities are being sold at a profit to be returned to the SFA.  Rather, it is whether the commodity products are being put to the use for which they are intended, and being consumed by the people for whom they are intended.

 

Examples of acceptable use of commodities are:

 

n      Repackaging and selling commodity peanuts in the a la carte sales line;

n      Serving commodity beef patties at a football banquet.  The cost of all meals would be covered from sources other than the nonprofit food service account.  The meal cost must at least be equal to or greater than the value of the commodities contained in the meal.  The USDA value of the commodities must accrue to the nonprofit school food service account;

n      Using donated product in baking items that are sold in the teachers lounge as long as they are also sold/served to students.

 

Examples of unacceptable use are:

 

n      Catering operations for schools not participating in the National School Lunch Program (NSLP);

n      Catering for child care centers not participating in the Child and Adult Care Food Program;

n      Commodity beef patties served at a football banquet where the market value of the commodity food is not returned to the nonprofit school food service account;

n      Donated product used in baking items that are given/sold exclusively to faculty, Parent’s Teacher’s Association (PTA), or the public.

 

USDA continues to prohibit donated foods from being used in any non-student related events such as catering banquets for the Chamber of Commerce, partisan political functions, or supplying refreshments for the PTA, etc.  We further prohibit SFAs from increasing their orders for USDA commodities for the purpose of supporting school related functions other than NSLP, School Breakfast Program (SBP), etc.

 

We recognize that monitoring the incorporation of commodity foods with other foods in a kitchen is difficult - especially where catering operations are ongoing; however, SFAs must ensure that donated foods are used to benefit the intended recipients, the students participating in USDA commodity assistance programs.  To ensure that this policy is implemented by SFAs, it is essential that the use and sale of commodities be monitored as part of the regular review activity performed by SAs.  Review questions should be incorporated into the Food Distribution portion of school review forms at the earliest opportunity.  The Food and Nutrition Service management evaluation teams will review for compliance with this policy interpretation.