Appendix 1 Code of Federal Regulations, Title 7, Part 210

Supporting Statement for OMB Clearance for the Study of Non-Response to the
School Meals Application Verification Process
Appendix 1
Code of Federal Regulations, Title 7, Part 210

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§ 210.18

7 CFR Ch. II (1–1–09 Edition)

by law from disbursing State appropriated funds to nonpublic schools
shall be required to match general cash
assistance funds expended for meals
served in such schools, or to disburse
to such schools any of the State revenues required to meet the requirements
of paragraph (a) of this section. Furthermore, the requirements of this section do not apply to schools in which
the Program is administered by a
FNSRO.
(c)
Territorial
waiver.
American
Samoa and the Commonwealth of the
Northern Mariana Islands shall be exempted from the matching requirements of paragraph (a) of this section if
their respective matching requirements are under $100,000.
(d) Applicable revenues. The following
State revenues, appropriated or used
specifically for program purposes
which are expended for any school year
shall be eligible for meeting the applicable percentage of the matching requirements prescribed in paragraph (a)
of this section for that school year:
(1) State revenues disbursed by the
State agency to school food authorities
for program purposes, including revenue disbursed to nonprofit private
schools where the State administers
the program in such schools;
(2) State revenues made available to
school food authorities and transferred
by the school food authorities to the
nonprofit school food service accounts
or otherwise expended by the school
food authorities in connection with the
nonprofit school food service program;
and
(3) State revenues used to finance the
costs (other than State salaries or
other State level administrative costs)
of the nonprofit school food service
program, i.e.:
(i) Local program supervision;
(ii) Operating the program in participating schools; and
(iii) The intrastate distribution of
foods donated under part 250 of this
chapter to schools participating in the
program.
(e) Distribution of matching revenues.
All State revenues made available
under paragraph (a) of this section are
to be disbursed to school food authorities participating in the Program, except as provided for under paragraph (b)

of this section. Distribution of matching revenues may be made with respect
to a class of school food authorities as
well as with respect to individual
school food authorities.
(f) Failure to match. If, in any school
year, a State fails to meet the State
revenue matching requirement, as prescribed in paragraph (a) of this section,
the general cash assistance funds utilized by the State during that school
year shall be subject to recall by and
repayment to FNS.
(g) Reports. Within 120 days after the
end of each school year, each State
agency shall submit an Annual Report
of Revenues (FNS–13) to FNS. This report identifies the State revenues to be
counted toward the State revenue
matching requirements specified in
paragraph (a) of this section.
(h) Accounting system. The State
agency shall establish or cause to be
established a system whereby all expended State revenues counted in
meeting the matching requirements
prescribed in paragraph (a) of this section are properly documented and accounted for.
§ 210.18

Administrative reviews.

(a) Implementation dates. For the
school year beginning July 1, 1992, each
State agency shall conduct administrative reviews as prescribed under this
section. However, FNS will approve a
State agency’s written request if FNS
determines that the State agency has
demonstrated good cause to delay implementation of the provisions specified under this section to January 1,
1993. At State agency discretion, State
agencies may begin implementation of
the provisions of this section on August 16, 1991. FNS review responsibilities are specified under § 210.29 of this
part.
(b) Definitions. The following definitions are provided in order to clarify
State agency administrative review requirements:
(1) Administrative reviews means the
initial comprehensive on-site evaluation of all school food authorities participating in the Program in accordance with the provisions of this section. The term ‘‘administrative review’’ is used to reflect a review of

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Food and Nutrition Service, USDA

§ 210.18
(7) Participation factor means the percentages of children approved by the
school for free lunches, reduced price
lunches, and paid lunches, respectively,
who are participating in the Program.
The free participation factor is derived
by dividing the number of free lunches
claimed for any given period by the
product of the number of children approved for free lunches for the same period times the operating days in that
period. A similar computation is used
to determine the reduced price and
paid participation factors. The number
of children approved for paid lunches is
derived by subtracting the number of
children approved for free and reduced
price lunches for any given period from
the total number of children enrolled
in the reviewed school for the same period of time, if available. If such enrollment figures are not available, the
most recent total number of children
enrolled shall be used. If school food
authority participation factors are unavailable or unreliable, State-wide
data shall be employed.
(8) Review period means the period of
time covered by the administrative review or follow-up review. The review
period is specified in paragraph (f)(2) of
this section.
(9) Review threshold means the degree
of error in a critical area of review
which, if exceeded during an administrative review or follow-up review of a
school food authority, may trigger a
follow-up review of that school food authority.
(10) Small school food authority means,
in any State, a school food authority
that participates in the Program and is
not a large school food authority, as
defined in this section.
(c) Timing of reviews. The first year of
the first 5-year review cycle began on
July 1, 1992, or as otherwise authorized
under paragraph (a) of this section and
shall end on June 30, 1994. For each
State agency, the first 5-year review
cycle shall end on June 30, 1998. Administrative reviews and follow-up reviews
shall be conducted as follows:
(1) Administrative reviews. At a minimum, State agencies shall conduct administrative reviews of all school food
authorities at least once during each 5year review cycle; provided that each
school food authority is reviewed at

both critical and general areas in accordance with paragraphs (g) and (h) of
this section, and includes other areas
of Program operations determined by
the State agency to be important to
Program performance.
(2) Critical areas means the following
two performance standards described in
detail in paragraph (g) of this section
which serve as measures of compliance
with Program regulations:
(i) Performance Standard 1—Certification/Counting/Claiming—All free, reduced price and paid lunches claimed
for reimbursement are served only to
children eligible for free, reduced price
and paid lunches, respectively; and
counted, recorded, consolidated and reported through a system which consistently yields correct claims.
(ii) Performance Standard 2—Meal Elements. Lunches claimed for reimbursement within the school food authority
contain meal elements (food items/
components, menu items or other
items, as applicable) as required under
§ 210.10.
(3) Documented corrective action means
written notification required of the
school food authority to certify that
the corrective action required for each
violation has been completed and to
notify the State agency of the dates of
completion. Documented corrective action may be provided at the time of the
review or may be submitted to the
State agency within specified timeframes.
(4) Follow-up reviews means any
visit(s) to the school food authority
subsequent to the administrative review to ensure corrective actions are
taken.
(5) General areas means the areas of
review specified in paragraph (h) of
this section.
(6) Large school food authority means,
in any State:
(i) All school food authorities that
participate in the Program and have
enrollments of 40,000 children or more
each; or
(ii) If there are less than two school
food authorities with enrollments of
40,000 or more, the two largest school
food authorities that participate in the
Program and have enrollments of 2,000
children or more each.

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§ 210.18

7 CFR Ch. II (1–1–09 Edition)

least once every 6 years. The on-site
portion of the administrative review
shall be completed during the school
year in which the review was begun.
(2) Expanded review cycle. State agencies are encouraged to conduct administrative reviews of large school food
authorities and of any school food authorities which may benefit from a
more frequent interval than the minimum 5-year cycle required in paragraph (c)(1) of this section.
(3) Exceptions. FNS may, on an individual school food authority basis, approve written requests for 1-year extensions to the 6-year review interval
specified in paragraph (c)(1) of this section if FNS determines this requirement conflicts with efficient State
agency management of the Program.
(4) Follow-up reviews. The State agency is encouraged to conduct first follow-up reviews in the same school year
as the administrative review; but in no
event shall first follow-up reviews be
conducted later than December 31 of
the school year following the administrative review. Subsequent follow-up
reviews shall be scheduled in accordance with paragraph (i)(5) of this section.
(d) Scheduling school food authorities.
The State agency shall use its own criteria to schedule school food authorities for administrative reviews; provided that the requirements of paragraph (c) of this section are met. State
agencies are encouraged to take into
consideration the findings of the
claims review process required under
§ 210.8(b)(2) of this part in the selection
of school food authorities.
(1) Schedule of reviews. To ensure no
unintended overlap occurs, the State
agency shall inform FNS of the anticipated schedule of school food authority
reviews upon request.
(2) Reporting follow-up review activity.
At such time as the State agency determines that a follow-up review is
needed, the State agency shall notify
FNS of the names of those large school
food authorities exceeding any one of
the critical area review thresholds
specified in paragraph (i) of this section.
(3) Exceptions. In any school year in
which FNS or OIG conducts a review or
investigation of a school food author-

ity in accordance with § 210.19(a)(5) of
this part, the State agency shall, unless otherwise authorized by FNS,
delay conduct of a scheduled administrative review until the following
school year. The State agency shall
document any exception authorized
under this paragraph.
(e) Number of schools to review. The
State agency is encouraged to review
all schools meeting the school selection criteria specified in paragraph
(e)(1) of this section. At a minimum,
the State agency shall review the number of schools specified in paragraph
(e)(1) of this section and shall select
the schools to be reviewed on the basis
of the school selection criteria specified in paragraph (e)(2) of this section.
(1) Minimum number of schools. Except
for residential child care institutions,
the State agency shall review all
schools with a free average daily participation of 100 or more and a free participation factor of 100 percent or
more. In no event shall the State agency review less than the minimum number of schools illustrated in table A:
TABLE A
No. of schools in the school food authority

Minimum no. of
schools to be reviewed

1 to 5 ....................................................
6 to 10 ..................................................
11 to 20 .................................................
21 to 40 .................................................
41 to 60 .................................................
61 to 80 .................................................
81 to 100 ...............................................
101 or more .............................................

1 Twelve plus 5 percent of the number of schools over 100.
Fractions shall be rounded to the nearest whole number.

(2) School selection criteria. (i) Selection of additional schools to meet the
minimum number of schools required
under paragraph (e)(1) of this section,
shall be based on the following criteria:
(A) Elementary schools with a free
average daily participation of 100 or
more and a free participation factor of
97 percent or more;
(B) Secondary schools with a free average daily participation of 100 or more
and a free participation factor of 77
percent or more; and
(C) Combination schools with a free
average daily participation of 100 or
more and a free participation factor of
87 percent or more. A combination

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Food and Nutrition Service, USDA

§ 210.18

school means a school with a mixture
of elementary and secondary grades.
(ii) When the number of schools selected on the basis of the criteria established in paragraph (A) through
paragraph (C) of this paragraph are not
sufficient to meet the minimum number of schools required under paragraph
(e)(1) of this section, the schools selected for review shall be selected on
the basis of State agency criteria
which may include low participation
schools, recommendations from a food
service director based on findings from
the on-site visits or the claims review
process required under § 210.8(a) of this
part; or any school in which the daily
lunch counts appear questionable, e.g.,
identical or very similar claiming patterns, and/or large changes in free
lunch counts.
(3) Pervasive problems. If the State
agency review finds pervasive problems
in a school food authority, FNS may
authorize the State agency to cease review activities prior to reviewing the
required number of schools under paragraph (e)(1) of this section. Where FNS
authorizes the State agency to cease
review activity, FNS may either conduct the review activity itself or refer
the school food authority to OIG.
(f) Scope of review. During the course
of an administrative review, each State
agency shall monitor compliance with
the critical and general areas identified in paragraphs (g) and (h) of this
section.
(1) Review form. State agencies shall
use the administrative review form
prescribed by FNS for the critical areas
of review specified in paragraph (g) of
this section. State agencies may use
their own administrative review form
for the general areas of review specified in paragraph (h) of this section.
(2) Review period. (i) The review period for administrative reviews and follow-up reviews shall cover, at a minimum, the most recent month for
which a Claim for Reimbursement was
submitted; provided that such Claim
for Reimbursement covers at least 10
operating days.
(ii) Subject to FNS approval, the
State agency may conduct a review
early in the school year, prior to the
submission of a Claim for Reimbursement. In such cases, the review period

shall be the prior month of operation
in the current school year, provided
that such month includes at least 10
operating days.
(3) Audit findings. To prevent duplication of effort, the State agency may
use any recent and currently applicable
findings from Federally-required audit
activity or from any State-imposed
audit requirements. Such findings may
be used only insofar as they pertain to
the reviewed school(s) or the overall
operation of the school food authority
and they are relevant to the review period. The State agency shall document
the source and the date of the audit.
(g) Critical areas of review. The performance standards listed in this paragraph are deemed critical since compliance in these areas is directly linked to
the service of a reimbursable lunch.
(1) Performance Standard 1 (All free, reduced price and paid lunches claimed for
reimbursement are served only to children
eligible for free, reduced price and paid
lunches, respectively; and are counted, recorded, consolidated and reported through
a system which consistently yields correct
claims.) The State agency shall determine that the free and reduced price
eligibility determinations are correct.
In addition, the State agency shall determine that for each day of operation
for the review period, the number of
free, reduced price and paid lunches
claimed for each reviewed school is not
more than the number of lunches
served to children eligible for free, reduced price and paid lunches, respectively, in those schools for the review
period. The State agency shall also determine that a lunch counting system
is being used which accurately counts,
records, consolidates and reports the
reimbursable lunches served, by type.
(i) For each school reviewed, the
State agency shall:
(A) Determine the number of children
eligible for free, reduced price and paid
lunches, by type, for the review period.
To make this determination:
(1) The State agency shall:
(i) Review all approved free and reduced price applications for children in
the reviewed schools back to the beginning of the school year to determine
whether each child’s application is

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§ 210.18

7 CFR Ch. II (1–1–09 Edition)

complete and correctly approved in accordance with all applicable provisions
of 7 CFR part 245; or
(ii) Review all approved free and reduced price applications effective for
the review period for children in the reviewed schools; or
(iii) Review all approved free and reduced price applications effective on
the day(s) the review is conducted for
children in the reviewed schools.
(2) In lieu of reviewing all of the free
and reduced price applications as required under paragraph (g)(1)(i)(A)(1) of
this section, the State agency may review a statistically valid sample of
those applications. If the State agency
chooses to review a statistically valid
sample of applications, the State agency shall ensure that the sample size is
large enough so that there is a 95 percent chance that the actual error rate
for all applications is not less than 2
percentage points less than the error
rate found in the sample (i.e., the lower
bound of the one-sided 95 percent confidence interval is no more than 2 percentage points less than the point estimate). In addition, the State agency
shall determine the need for follow-up
reviews and base fiscal action upon the
error rate found in the sample.
(3) Evaluate whether the previous
year’s eligibility determinations are
used after 30 operating days following
the first day of school, or as otherwise
established by the State agency; provided that the State agency-developed
timeframe does not exceed the 30 operating day limit.
(4) In the case where children are determined eligible for free lunches based
on documentation from the local food
stamp, Food Distribution Program on
Indian Reservations (FDPIR) or Temporary Assistance for Needy Families
(TANF) office which certifies that the
children are currently members of
households receiving benefits under the
Food Stamp Program, FDPIR or
TANF, determine that the certification
from the Food Stamp Program, FDPIR
or TANF is official; all the information
required under § 245.6 of this part is
complete; and such children were enrolled in the school under review during the review period.
(B) Evaluate the system for issuing
benefits and updating eligibility status

by validating the mechanism(s) the reviewed school uses to provide benefits
to eligible children, e.g., master list.
The State agency shall determine
whether the system is adequate and,
within the timeframes established in
§ 210.7(c)(1)(ii)(B), reflects changes due
to verification findings, transfers, reported changes in household size or income, or from a household’s decision to
decline school lunch benefits or any notification from the household that it is
no longer certified to receive food
stamp, Food Distribution Program for
Households on Indian Reservations
(FDPIR) or Temporary Assistance for
Needy Families (TANF) benefits.
(C) Determine whether the lunch
counting system yields correct claims.
At a minimum, the State agency shall
determine whether:
(1) The daily lunch counts, by type,
for the review period are more than the
product of the number of children determined by the school/school food authority to be eligible for free, reduced
price, and paid lunches for the review
period times an attendance factor. If
the lunch count, for any type, appears
questionable or significantly exceeds
the product of the number of eligibles,
for that type, times an attendance factor, documentation showing good cause
must be available for review by the
State agency.
(2) Each type of food service line provides accurate point of service lunch
counts, by type, and those lunch counts
are correctly counted and recorded. If
an alternative counting system is employed (in accordance with § 210.7(c)(2)),
the State agency shall ensure that it
provides accurate counts of reimbursable lunches, by type, and is correctly
implemented as approved by the State
agency.
(3) All lunches are correctly counted,
recorded, consolidated and reported for
the day they are served.
(ii) For each school food authority
reviewed, the State agency shall review
lunch count records to ensure that the
lunch counts submitted by each reviewed school are correctly consolidated, recorded, and reported by the
school food authority on the Claim for
Reimbursement.
(2) Performance Standard 2 (Lunches
claimed for reimbursement within the

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Food and Nutrition Service, USDA

§ 210.18
compliance with the requirements of
§ 245.6a of this title.
(v) Confirm that the verification
process is complete for each application verified by or on behalf of the reviewed schools. Verification is considered complete either when a child’s eligibility for the level of benefits for
which he or she was approved is confirmed, changed to a higher level of
benefit, or a letter of adverse action
has been sent.
(vi) Ensure that verification records
are
maintained
as
required
by
§ 245.6a(c) of this title.
(vii) Determine that, for each reviewed school, the lunch count system
does not overtly identify children eligible for free and reduced price lunches.
(viii) Review a representative sample
of denied applications to evaluate
whether the determining official correctly denied applicants for free and reduced price lunches.
(2) Food quantities. For each school
reviewed, the State agency must observe a significant number of Program
lunches counted at the point of service
for each type of serving line to determine whether those lunches appear to
provide meal elements (food items/
components, menu items or other
items, as applicable) in the quantities
required under § 210.10. If visual observation suggests that quantities are insufficient, the State agency shall require the reviewed schools to provide
documentation demonstrating that the
required amounts of food were available for service for each day of the review period.
(3) Civil rights. The State agency shall
examine the school food authority’s
compliance with the civil rights provisions specified in § 210.23(b) of this part.
(4) Monitoring responsibilities. The
State agency shall ensure that the
school food authority conducts on-site
reviews in accordance with § 210.8(a)(1)
of this part and monitors claims in accordance with § 210.8(a)(2) and (a)(3) of
this part.
(5) Reporting and recordkeeping. The
State agency shall determine that the
school food authority submits reports
and maintains records as required
under 7 CFR parts 210 and 245.
(i) Follow-up reviews. All school food
authorities found to have a critical

school food authority contain meal elements (food items/components, menu items
or other items, as applicable) as required
under § 210.10. For each school reviewed, the State agency must:
(i) For the day of the review, observe
the serving line(s) to determine whether all required meal elements (food
items/components, menu items or
other items, as applicable) as required
under § 210.10 are offered.
(ii) For the day of the review, observe
a significant number of the Program
lunches counted at the point of service
for each type of serving line, to determine whether those lunches contain
the required number of meal elements
(food items/components, menu items or
other items, as applicable) as required
under § 210.10.
(iii) Review menu records for the review period to determine whether all
required meal elements (food items/
components, menu items or other
items, as applicable) as required under
§ 210.10 have been offered.
(h) General areas of review. The general areas listed in this paragraph reflect major Program requirements. The
general areas of review shall include,
but are not limited to, the following
areas:
(1) Free and reduced price process. In
the course of the review of each school
food authority, the State agency shall:
(i) Review the implementation of the
free and reduced price policy statement
to ensure it is implemented as approved.
(ii) Evaluate whether the required
minimum number of applications are
verified with respect to the selection
method used.
(iii) Determine that applications for
verification are selected through random or focused sampling in accordance
with the provisions of § 245.6a of this
title and FNS Instructions, and that no
discrimination exists in the selection
process.
(iv) Establish that verification is
completed by December 15. If the administrative review occurs prior to the
December 15 deadline, the State agency
shall evaluate the verification activities that have occurred to date and assess whether these activities represent
a good faith effort that will result in

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§ 210.18

7 CFR Ch. II (1–1–09 Edition)

area violation in excess of any one of
the review thresholds specified in this
paragraph are subject to follow-up reviews. State agencies shall notify FNS
of the names of large school food authorities exceeding critical area review
thresholds in accordance with paragraph (d)(2) of this section. The State
agency shall conduct a first follow-up
review of any large school food authority found on an administrative review
to have critical area violations in excess of any one of the review thresholds. State agencies shall also conduct
a first follow-up review of at least 25
percent of the small school food authorities found on a review to have
critical area violations in excess of any
one of the review thresholds. State
agencies shall conduct additional follow-up reviews of any school food authority which has a critical area violation exceeding a review threshold on
the first follow-up or any subsequent
follow-up review regardless of whether
such review is conducted by FNS or the
State agency.
(1) Selection of small school food authorities. In determining which small
school food authorities to include in
the follow-up review sample, State
agencies shall select those school food
authorities which have the most serious problems, including, but not limited to, systemic accountability problems, large overclaims, significant
lunch pattern violations, etc.
(2) Selection of schools. (i) If the critical area violation(s) responsible for
follow-up review activity are limited to
school food authority level problems
(e.g. centralized application processing
or centralized kitchen), the State agency may limit the follow-up review to
the school food authority level.
(ii) If the critical area violation(s) responsible for follow-up review activity
were identified in the review of a
school(s), then State agencies shall review at least the minimum number of
schools required under paragraph (e)(1)
of this section. State agencies shall
meet the minimum number of schools
requirement by selecting those schools
found, on a previous review, to have
significant critical area violations. If
any additional schools must be selected
to meet the minimum required number, the State agency shall select from

those schools which meet State agency-developed criteria identified under
paragraph (e)(2)(ii) of this section.
(3) Review thresholds. The review
thresholds apply only to the critical
areas of review and are designed to
limit follow-up reviews to those school
food authorities with serious problems.
The provisions of paragraph (i) of this
section apply when:
(i) For Performance Standard 1—
(A) A number of the reviewed schools
in a school food authority, as specified
in Table B, have an inadequate system
for certification, issuing benefits or updating eligibility status; or for counting, recording, consolidating or reporting lunches, by type; or
(B) The school food authority has an
inadequate system for consolidating
lunch counts, by type, or for reporting
claims; or, if applicable, for certification, issuing benefits or updating eligibility status.
(C) At the school and school food authority level, a system for certification, issuing benefits or updating eligibility status is inadequate if 10 percent or more (but not less than 100
lunches) of the free and reduced price
lunches claimed for the review period
(for any school reviewed) are claimed
incorrectly due to errors of certification, benefit issuance or updating of
eligibility status.
TABLE B
Number of
schools violating performance
standard 1

Number of schools reviewed

1 to 5 ...............................................................
6 to 10 .............................................................
11 to 20 ...........................................................
21 to 30 ...........................................................
31 to 40 ...........................................................
41 to 50 ...........................................................
51 to 60 ...........................................................
61 to 70 ...........................................................
71 to 80 ...........................................................
81 to 90 ...........................................................
91 to 100 .........................................................
101 or more .....................................................

* 11 plus the number identified above for the appropriate
increment.

(ii) For Performance Standard 2—10
percent or more of the total number of
Program lunches observed in a school
food authority are missing one or more
of the required meal elements (food
items/components, menu items or

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§ 210.18

other items, as applicable) as required
under § 210.10.
(4) Scope of follow-up reviews. On any
follow-up review, the State agency is
encouraged to review all of the critical
and general areas of review specified in
paragraph (g) and (h) of this section for
those schools which were not reviewed
during the administrative review. At a
minimum, the State agency shall:
(i) For each school selected for review (or for the school food authority,
as applicable,) review the critical areas
for which the review thresholds were
exceeded by the school food authority
on a previous review;
(ii) Determine whether the school
food authority has satisfactorily completed the corrective actions in accordance with paragraph (k) of this section
required for both critical and general
areas within the timeframes established by the State agency;
(iii) Evaluate whether these corrective actions resolved the problem(s);
and
(iv) If the State agency did not evaluate the certification, count and milk/
meal service procedures for the School
Breakfast Program (7 CFR part 220)
and/or the Special Milk Program for
Children (7 CFR part 215) or offering
meal supplements in after hour care
programs (7 CFR part 210) in those
schools selected for the administrative
review and participating in those Programs, the State agency shall do so for
those schools selected for the first follow-up review.
(5) Critical area violations identified in
a follow-up review. Critical area violations identified on a follow-up review
shall be addressed as follows:
(i) If, during a follow-up review, the
State agency determines, that corrective actions have not been satisfactorily completed in accordance with
the documented corrective action, the
State agency shall: require the school
food authority to resolve the problems
and to submit documented corrective
action to the State agency ; take fiscal
action for critical area violations as
specified in paragraph (m) of this section; and withhold Program payments
in accordance with paragraph (l) of this
section, until such time as a follow-up
review, requested by the school food
authority, indicates the problem has

been corrected. If the State agency determines that the corrective actions
have been completed as specified in the
documented corrective action, but
those corrective actions do not effectively resolve the problem, the State
agency shall follow the requirements
for new critical area violations specified in paragraphs (i)(5)(ii) and (iii) of
this section.
(ii) If new critical area violations are
observed that exceed a review threshold, the State agency shall: Require
the school food authority to resolve
the problems and to submit documented corrective action to the State
agency; take fiscal action as specified
in paragraph (m) of this section; and
conduct a follow-up review within 6 operating months of the first follow-up
review.
(iii) If new critical area violations
are observed which do not exceed review thresholds, the State agency
shall: Require the school food authority to resolve the problem and to submit documented corrective action to
the State agency within specified timeframes; and take fiscal action in accordance with paragraph (m) of this
section. If adequate documented corrective action is not received within
those timeframes, the State agency
shall withhold Program payments in
accordance with paragraph (l) of this
section, until such time as adequate
documented corrective action is received.
(6) General area violations identified in
a follow-up review. General area violations identified in a follow-up review
shall be addressed as follows:
(i) If, during a follow-up review, the
State agency determines that corrective actions have not been taken in accordance with the documented corrective action, the State agency shall
withhold Program payments in accordance with paragraph (l) of this section,
until such time as the State agency receives adequate documented corrective
action.
(ii) If the State agency determines
that the corrective actions taken did
not effectively resolve the problem, or
if new general area violations are observed on a follow-up review, the State
agency shall require the school food
authority to resolve the problem and

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§ 210.18

7 CFR Ch. II (1–1–09 Edition)

to submit documented corrective action to the State agency within specified timeframes. If adequate documented corrective action is not received within those timeframes, the
State agency shall withhold Program
payments in accordance with paragraph (l) of this section, until such
time as adequate documented corrective action is received.
(7) Exceptions. FNS may, on an individual school food authority basis, approve written requests for exceptions
to the follow-up review requirement
specified in paragraph (i)(1) of this section if FNS determines that the requirement conflicts with efficient
State agency management of the program.
(j) Exit conference and notification.
The State agency shall hold an exit
conference at the close of the administrative review and of any subsequent
follow-up review to discuss the violations observed, the extent of the violations and a preliminary assessment of
the actions needed to correct the violations. The State agency shall discuss
an appropriate deadline(s) for completion of corrective action, provided that
the deadline(s) results in the completion of corrective action on a timely
basis. After every review, the State
agency shall provide written notification of the review findings to the
school food authority’s Superintendent
(or equivalent in a non-public school
food authority) or authorized representative. The written notification
shall include the review findings, the
needed corrective actions, the deadlines for completion of the corrective
action, and the potential fiscal action.
As a part of the denial of all or a part
of a Claim for Reimbursement or withholding payment in accordance with
the provisions of this section, the State
agency shall provide the school food
authority a written notice which details the grounds on which the denial
of all or a part of the Claim for Reimbursement or withholding payment is
based. This notice, which shall be sent
by certified mail, return receipt requested, shall also include a statement
indicating that the school food authority may appeal the denial of all or a
part of a Claim for Reimbursement or
withholding payment and the entity

(i.e., FNS or State agency) to which
the appeal should be directed. The
State agency shall notify the school
food authority, in writing, of the appeal
procedures
as
specified
in
§ 210.18(q) for appeals of State agency
findings, and for appeals of FNS findings, provide a copy of § 210.29(d)(3) of
the regulations.
(k) Corrective action. Corrective action is required for any violation under
either the critical or general areas of
the review. Corrective action shall be
applied to all schools in the school food
authority, as appropriate, to ensure
that previously deficient practices and
procedures are revised system-wide.
Corrective actions may include training, technical assistance, recalculation
of data to ensure the correctness of any
claim that the school food authority is
preparing at the time of the review, or
other actions. Fiscal action shall be
taken in accordance with paragraph
(m) of this section.
(1) Extensions of the timeframes. If extraordinary circumstances arise where
a school food authority is unable to
complete the required corrective action within the timeframes specified by
the State agency, the State agency
may extend the timeframes upon written request of the school food authority.
(2) Documented corrective action. Documented corrective action is required
for any degree of violation of general
or critical areas identified in an administrative review or on any follow-up review. Documented corrective action
may be provided at the time of the review; however, it shall be postmarked
or submitted to the State agency no
later than 30 days from the deadline for
completion of each required corrective
action, as specified under paragraph (j)
of this section or as otherwise extended
by the State agency under paragraph
(k)(1) of this section. The State agency
shall maintain any documented corrective action on file for review by FNS.
(l) Withholding payment. At a minimum, the State agency shall withhold
Program payments to a school food authority as follows:
(1) Cause. (i) The State agency shall
withhold all Program payments to a
school food authority if documented

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Food and Nutrition Service, USDA

§ 210.18

corrective action for critical area violation(s) which exceed the review
threshold(s) is not provided within the
deadlines specified in paragraph (k)(2)
of this section; and/or
(ii) The State agency shall withhold
all Program payments to a school food
authority if, in the event that a followup review is not conducted, the State
agency finds that corrective action for
a critical area violation which exceeded the review threshold was not completed within the deadlines specified in
paragraph (j) of this section or as otherwise extended by the State agency
under paragraph (k)(1) of this section;
and/or
(iii) The State agency shall withhold
all Program payments to a school food
authority if, on a follow-up review, the
State agency finds a critical area violation which exceeded the review
threshold on a previous review and continues to exceed the review threshold
on a follow-up review.
(iv) The State agency may withhold
payments at its discretion, if the State
agency finds that documented corrective action is not provided within the
deadlines specified in paragraph (k)(2)
of this section, that corrective action
is not complete or that corrective action was not taken as specified in the
documented corrective action for a
general area violation or for a critical
area violation which did not exceed the
review threshold.
(2) Duration. In all cases, Program
payments shall be withheld until such
time as corrective action is completed,
and documented corrective action is
received and deemed acceptable by the
State agency or as otherwise specified
in paragraph (i)(5) of this section. Subsequent to the State agency’s acceptance of the corrective actions (and a
follow-up review, when required), payments will be released for all lunches
served in accordance with the provisions of this part during the period the
payments were withheld. In very serious cases, the State agency will evaluate whether the degree of non-compliance warrants termination in accordance with § 210.25 of this part.
(3) Exceptions. The State agency may,
at its discretion, reduce the amount required to be withheld from a school
food authority pursuant to paragraph

(l)(1)(i) through (iii) of this section by
as much as 60 percent of the total Program payments when it is determined
to be in the best interest of the Program. FNS may authorize a State
agency to limit withholding of funds to
an amount less than 40 percent of the
total Program payments, if FNS determines such action to be in the best interest of the Program.
(4) Failure to withhold payments. FNS
may suspend or withhold Program payments, in whole or in part, to those
State agencies failing to withhold Program payments in accordance with
paragraph (l)(1) of this section and may
withhold administrative funds in accordance with § 235.11(b) of this title.
The withholding of Program payments
will remain in effect until such time as
the State agency documents compliance with paragraph (l)(1) of this section to FNS. Subsequent to the documentation of compliance, any withheld
administrative funds will be released
and payment will be released for any
lunches served in accordance with the
provisions of this part during the period the payments were withheld.
(m) Fiscal action. For purposes of the
critical areas of the administrative review and any follow-up reviews, fiscal
action is required for all violations of
Performance Standards 1 and 2. Except
that, on an administrative review, the
State agency may limit fiscal action
from the point corrective action occurs
back through the beginning of the review period for errors identified under
paragraphs (g)(1)(i)(A) and (g)(1)(i)(B)
of this section, provided corrective action occurs. Fiscal action shall be
taken in accordance with the provisions identified under § 210.19(c) of this
part.
(n) Miscellaneous reporting requirement. Each State agency shall report to
FNS the results of reviews by March 1
of each school year, on a form designated by FNS. In such annual reports, the State agency shall include
the results of all administrative reviews and follow-up reviews conducted
in the preceding school year.
(o) Summary of reporting requirements.
Each State agency shall report to FNS:
(1) The names of those large school
food authorities exceeding any one of
the critical area review thresholds as

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§ 210.18

7 CFR Ch. II (1–1–09 Edition)

described in paragraph (d)(2) of this
section.
(2) The results of reviews by March 1
of each school year on a form designated by FNS, as specified under
paragraph (n) of this section.
(p) Recordkeeping. Each State agency
shall keep records which document the
details of all reviews and demonstrate
the degree of compliance with the critical and general areas of review.
Records shall be retained by the State
agency as specified in § 210.23(c) of this
part. Such records shall include documentation of administrative reviews
and follow-up reviews. As appropriate,
the records shall include documented
corrective action, and documentation
of withholding of payments and fiscal
action, including recoveries made. Additionally, the State agency must have
on file:
(1) Criteria for selecting schools on
first and follow-up reviews in accordance with paragraphs (e)(2)(ii) and
(i)(2)(ii) of this section.
(2) Its system for selecting small
school food authorities for follow-up
reviews in accordance with paragraph
(i)(1) of this section.
(3) Documentation demonstrating
compliance with the statistical sampling requirements in accordance with
paragraph (g)(1)(i)(A)(1) of this section,
if applicable.
(q) School food authority appeal of
State agency findings. Except for FNSconducted reviews authorized under
§ 210.29(d)(2), each State agency shall
establish an appeal procedure to be followed by a school food authority requesting a review of a denial of all or a
part of the Claim for Reimbursement
or withholding payment arising from
administrative or follow-up review activity conducted by the State agency
under § 210.18 of this part. State agencies may use their own appeal procedures provided the same procedures are
applied to all appellants in the State
and the procedures meet the following
requirements: appellants are assured of
a fair and impartial hearing before an
independent official at which they may
be represented by legal counsel; decisions are rendered in a timely manner
not to exceed 120 days from the date of
the receipt of the request for review;
appellants are afforded the right to ei-

ther a review of the record with the
right to file written information, or a
hearing which they may attend in person; and adequate notice is given of the
time, date, place and procedures of the
hearing. If the State agency has not established its own appeal procedures or
the procedures do not meet the above
listed criteria, the State agency shall
observe the following procedures at a
minimum:
(1) The written request for a review
shall be postmarked within 15 calendar
days of the date the appellant received
the notice of the denial of all or a part
of the Claim for Reimbursement or
withholding of payment, and the State
agency shall acknowledge the receipt
of the request for appeal within 10 calendar days;
(2) The appellant may refute the action specified in the notice in person
and by written documentation to the
review official. In order to be considered, written documentation must be
filed with the review official not later
than 30 calendar days after the appellant received the notice. The appellant
may retain legal counsel, or may be
represented by another person. A hearing shall be held by the review official
in addition to, or in lieu of, a review of
written information submitted by the
appellant only if the appellant so specifies in the letter of request for review.
Failure of the appellant school food
authority’s representative to appear at
a scheduled hearing shall constitute
the appellant school food authority’s
waiver of the right to a personal appearance before the review official, unless the review official agrees to reschedule the hearing. A representative
of the State agency shall be allowed to
attend the hearing to respond to the
appellant’s testimony and to answer
questions posed by the review official;
(3) If the appellant has requested a
hearing, the appellant and the State
agency shall be provided with at least
10 calendar days advance written notice, sent by certified mail, return receipt requested, of the time, date and
place of the hearing;
(4) Any information on which the
State agency’s action was based shall
be available to the appellant for inspection from the date of receipt of the
request for review;

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Food and Nutrition Service, USDA

§ 210.19
(h) * * *
(1) * * *
(iii) Determine that applications for
verification are selected in accordance with
the applicable procedures in § 245.6a(c) of this
chapter and that no discrimination exists in
the selection process.
(iv) Establish that verification is completed by November 15 (or other date established in accordance with § 245.6a(b)(2)(i) or
(b)(2)(ii) of this chapter) including any follow-up activities as required in § 245.6a(f)(6)
of this chapter. * * *

(5) The review official shall be an
independent and impartial official
other than, and not accountable to,
any person authorized to make decisions that are subject to appeal under
the provisions of this section;
(6) The review official shall make a
determination based on information
provided by the State agency and the
appellant, and on Program regulations;
(7) Within 60 calendar days of the
State agency’s receipt of the request
for review, by written notice, sent by
certified mail, return receipt requested, the review official shall inform the State agency and the appellant of the determination of the review
official. The final determination shall
take effect upon receipt of the written
notice of the final decision by the
school food authority;
(8) The State agency’s action shall
remain in effect during the appeal
process;
(9) The determination by the State
review official is the final administrative determination to be afforded to
the appellant.
(r) FNS review activity. The term
‘‘State agency’’ and all the provisions
specified in paragraphs (a)–(h) of this
section refer to FNS when FNS conducts administrative reviews or followup
reviews
in
accordance
with
§ 210.29(d)(2). FNS will notify the State
agency of the review findings and the
need for corrective action and fiscal action. The State agency shall pursue
any needed follow-up activity.

*

*

EFFECTIVE DATE NOTE: At 73 FR 76858, Dec.
18, 2008, § 210.18 was amended by revising
paragraphs (h)(1)(iii) and (vi) and by amending paragraph (h)(1)(iv) by revising the first
sentence and by removing the words ‘‘December 15’’ from the second sentence and
adding in their place the words ‘‘November
15,’’ effective February 17, 2009. For the convenience of the user, the revised text is set
forth as follows:
cprice-sewell on PRODPC61 with CFR

*

Administrative reviews.

*

*

*

*

*

*

*

*

*

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*

*

§ 210.19 Additional responsibilities.
(a) General Program management. Each
State agency shall provide an adequate
number of consultative, technical and
managerial personnel to administer
programs and monitor performance in
complying with all Program requirements.
(1) Compliance with nutrition standards. (i) Beginning with School Year
1996–1997, State agencies shall evaluate
compliance, over the school week, with
the nutrition standards for lunches
and, as applicable, for breakfasts. Review activity may be confined to
lunches served under the Program unless a menu planning approach is used
exclusively in the School Breakfast
Program or unless the school food authority only offers breakfasts under
the School Breakfast Program. For
lunches, compliance with the requirements in § 210.10(b) and § 210.10(c), (d),
or (i)(1) or the procedures developed
under § 210.10(l), as applicable, is assessed. For breakfasts, see § 220.13(f)(3)
of this chapter.
(A) These evaluations may be conducted at the same time a school food
authority is scheduled for an administrative review in accordance with
§ 210.18. State agencies may also conduct these evaluations in conjunction
with technical assistance visits, other
reviews, or separately.
(B) The type of evaluation conducted
by the State agency shall be determined by the menu planning approach
chosen by the school food authority. At

[56 FR 32942, July 17, 1991; 56 FR 55527, Oct.
28, 1991, as amended at 57 FR 38584, Aug. 26,
1992; 57 FR 40729, Sept. 4, 1992; 59 FR 1894,
Jan. 13, 1994; 60 FR 31215, June 13, 1995; 60 FR
57147, Nov. 14, 1995; 64 FR 50740, 50741, Sept.
20, 1999; 64 FR 72471, Dec. 28, 1999; 65 FR 26922,
May 9, 2000]

§ 210.18

*

(vi) Ensure that verification records are
maintained as required by § 245.6a(i) of this
chapter.

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