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pdfSUBCHAPTER B—GENERAL REGULATIONS AND POLICIES—
FOOD DISTRIBUTION
PART 250—DONATION OF FOODS
FOR USE IN THE UNITED STATES,
ITS TERRITORIES AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION
Subpart A—General Purpose and
Administration
Sec.
250.1
250.2
250.3
250.4
250.5
Purpose and use of donated foods.
Definitions.
Administration at the Federal level.
Administration at the State level.
Civil rights.
Miscellaneous provisions.
Subpart D—Donated Foods in Contracts
with Food Service Management Companies
250.50 Contract requirements and procurement.
250.51 Crediting for, and use of, donated
foods.
250.52 Storage and inventory management
of donated foods.
250.53 Contract provisions.
250.54 Recordkeeping and reviews.
Subpart E—National School Lunch Program
(NSLP) and Other Child Nutrition Programs
Subpart B—Delivery, Distribution, and
Control of Donated Foods
250.10 Availability and ordering of donated
foods.
250.11 Delivery and receipt of donated food
shipments.
250.12 Storage and inventory management
at the distributing agency level.
250.13 Efficient and cost-effective distribution of donated foods.
250.14 Storage and inventory management
at the recipient agency level.
250.15 Out-of-condition donated foods, food
recalls, and complaints.
250.16 Claims and restitution for donated
food losses.
250.17 Use of funds obtained incidental to
donated food distribution.
250.18 Reporting requirements.
250.19 Recordkeeping requirements.
250.20 Audit requirements.
250.21 Distributing agency reviews.
250.22 Distributing
agency
performance
standards.
Subpart C—Processing of Donated Foods
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250.39
250.30 Processing of donated foods into end
products.
250.31 Procurement requirements.
250.32 Protection of donated food value.
250.33 Ensuring processing yields of donated
foods.
250.34 Substitution of donated foods.
250.35 Storage, food safety, quality control,
and inventory management.
250.36 End product sales and crediting for
the value of donated foods.
250.37 Reports, records, and reviews of processor performance.
250.38 Provisions of agreements.
250.56 Provision of donated foods in NSLP.
250.57 Commodity schools.
250.58 Ordering donated foods and their provision to school food authorities.
250.59 Storage, control, and use of donated
foods.
250.60 Child and Adult Care Food Program
(CACFP).
250.61 Summer
Food
Service
Program
(SFSP).
Subpart F—Household Programs
250.63 Commodity Supplemental Food Program (CSFP).
250.64 The Emergency Food Assistance Program (TEFAP).
250.65 Food Distribution Program on Indian
Reservations (FDPIR).
250.66 [Reserved]
Subpart G—Additional Provisions
250.67 Charitable institutions.
250.68 Nutrition Services Incentive Program
(NSIP).
250.69 Disasters.
250.70 Situations of distress.
250.71 OMB control numbers.
AUTHORITY: 5 U.S.C. 301; 7 U.S.C. 612c, 612c
note, 1431, 1431b, 1431e, 1431 note, 1446a-1, 1859,
2014, 2025; 15 U.S.C. 713c; 22 U.S.C. 1922; 42
U.S.C. 1751, 1755, 1758, 1760, 1761, 1762a, 1766,
3030a, 5179, 5180.
SOURCE: 53 FR 20426, June 3, 1988, unless
otherwise noted.
Subpart A—General Purpose and
Administration
SOURCE: 81 FR 23100, Apr. 19, 2016, unless
otherwise noted.
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§ 250.1
7 CFR Ch. II (1–1–22 Edition)
§ 250.1 Purpose and use of donated
foods.
(a) Purpose. The Department purchases foods and donates them to State
distributing agencies for further distribution and use in food assistance
programs, or to provide assistance to
eligible persons, in accordance with
legislation:
(1) Authorizing donated food assistance in specific programs (e.g., the
Richard B. Russell National School
Lunch Act for the National School
Lunch Program (NSLP)); or
(2) Authorizing the removal of surplus foods from the market or the support of food prices (i.e., in accordance
with Section 32, Section 416, and Section 709, as defined in § 250.2).
(b) Use of donated foods. Donated
foods must be used in accordance with
the requirements of this part and with
other Federal regulations applicable to
specific food assistance programs (e.g.,
7 CFR part 251 includes requirements
for the use of donated foods in The
Emergency Food Assistance Program
(TEFAP)). Such use may include activities designed to demonstrate or test
the effective use of donated foods (e.g.,
in nutrition classes or cooking demonstrations) in any programs. However,
donated foods may not be:
(1) Sold or exchanged, or otherwise
disposed of, unless approved by FNS, or
specifically permitted elsewhere in this
part or in other Federal regulations
(e.g., donated foods may be used in
meals sold in NSLP);
(2) Used to require recipients to make
any payments or perform any services
in exchange for their receipt, unless approved by FNS, or specifically permitted elsewhere in this part or in
other Federal regulations; or
(3) Used to solicit voluntary contributions in connection with their receipt, except for donated foods provided in the Nutrition Services Incentive Program (NSIP).
(c) Legislative sanctions. In accordance
with the Richard B. Russell National
School Lunch Act (42 U.S.C. 1760) and
the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note), any
person
who
embezzles,
willfully
misapplies, steals, or obtains by fraud
any donated foods (or funds, assets, or
property deriving from such donated
foods) will be subject to Federal criminal prosecution and other penalties.
Any person who receives, conceals, or
retains such donated foods or funds, assets, or property deriving from such
foods, with the knowledge that they
were embezzled, willfully misapplied,
stolen, or obtained by fraud, will also
be subject to Federal criminal prosecution and other penalties. The distributing agency, or other parties, as applicable, must immediately notify FNS of
any such violations.
§ 250.2 Definitions.
2 CFR part 200 means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards published by OMB. The
Part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D),
Cost Principles (subpart E), and Audit
Requirements (subpart F). (NOTE: PreFederal Award Requirements and Contents of Federal Awards (subpart C) do
not apply to the National School
Lunch Program).
ACL means the Administration for
Community Living, which is the DHHS
agency that administers NSIP.
Administering agency means a State
agency that has been approved by the
Department to administer a food assistance program. If such agency is
also responsible for the distribution of
donated foods, it is referred to as the
distributing agency in this part.
Adult care institution means a nonresidential adult day care center that participates independently in CACFP, or
that participates as a sponsoring organization, and that may receive donated
foods or cash-in-lieu of donated foods,
in accordance with an agreement with
the distributing agency.
Backhauling means the delivery of
donated foods to a processor for processing from a distributing or recipient
agency’s storage facility.
Bonus foods means Section 32, Section 416, and Section 709 donated foods,
as defined in this section, which are
purchased under surplus removal or
price support authority, and provided
to distributing agencies in addition to
legislatively authorized levels of assistance.
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Food and Nutrition Service, USDA
§ 250.2
CACFP means the Child and Adult
Care Food Program.
Carrier means a commercial enterprise that transports donated foods
from one location to another, but does
not store such foods.
Charitable institutions means public
institutions or private nonprofit organizations that provide a meal service
on a regular basis to predominantly eligible persons in the same place without marked changes. Some types of
charitable institutions are included
in§ 250.67.
Child care institution means a nonresidential child care center that participates independently in CACFP, or that
participates as a sponsoring organization, in accordance with an agreement
with the distributing agency.
Child nutrition program means NSLP,
CACFP, SFSP, or SBP.
Commingling means the storage of donated foods together with commercially purchased foods.
Commodity offer value means the minimum value of donated foods that the
distributing agency must offer to a
school food authority participating in
NSLP each school year. The commodity offer value is equal to the national per-meal value of donated food
assistance multiplied by the number of
reimbursable lunches served by the
school food authority in the previous
school year.
Commodity school means a school that
operates a nonprofit food service, in accordance with 7 CFR part 210, but that
receives additional donated food assistance rather than the cash assistance
available to it under Section 4 of the
Richard B. Russell National School
Lunch Act (42 U.S.C. 1753).
Consignee means an entity (e.g., the
distributing or recipient agency, a
commercial storage facility, or a processor) that receives a shipment of donated foods from a vendor or Federal
storage facility.
Contract value of the donated foods
means the price assigned by the Department to a donated food which must
reflect the Department’s current acquisition price. This may alternatively be
referred to as the USDA purchase
price.
CSFP means the Commodity Supplemental Food Program.
Department means the United States
Department of Agriculture (USDA).
DHHS means the United States Department of Health and Human Services.
Disaster means a Presidentially declared disaster or emergency, in accordance with Section 412 or 413 of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5179–5180), in which Federal assistance,
including donated food assistance, may
be provided to persons in need of such
assistance as a result of the disaster or
emergency.
Disaster organization means an organization authorized by FNS or a distributing agency, when appropriate, to
provide assistance to survivors of a disaster or a situation of distress.
Distributing agency means a State
agency selected by the Governor of the
State or the State legislature to distribute donated foods in the State, in
accordance with an agreement with
FNS, and with the requirements in this
part and other Federal regulations, as
applicable (e.g., a State agency distributing donated foods in CSFP must
comply with requirements in 7 CFR
part 247). Indian Tribal Organizations
may act as a distributing agency in the
distribution of donated foods on, or
near, Indian reservations, as provided
for in applicable Federal regulations
(e.g., 7 CFR part 253 or 254 for FDPIR).
A distributing agency may also be referred to as a State distributing agency.
Distribution charge means the cumulative charge imposed by distributing
agencies on school food authorities to
help meet the costs of storing and distributing donated foods, and administrative costs related to such activities.
Distributor means a commercial food
purveyor or handler who is independent
of a processor and charges and bills for
the handling of donated foods, and/or
sells and bills for the end products delivered to recipient agencies.
Donated foods means foods purchased
by USDA for donation in food assistance programs, or for donation to entities assisting eligible persons, in accordance with legislation authorizing
such purchase and donation. Donated
foods are also referred to as USDA
Foods.
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§ 250.2
7 CFR Ch. II (1–1–22 Edition)
Elderly nutrition project means a recipient agency selected by the State
Unit on Aging to receive assistance in
NSIP, which may include donated food
assistance.
Eligible persons means persons in need
of food assistance as a result of their:
(1) Economic status;
(2) Eligibility for a specific food assistance program; or
(3) Eligibility as survivors of a disaster or a situation of distress.
End product means a food product
that contains processed donated foods.
End product data schedule means a
processor’s description of its processing
of donated food into a finished end
product, including the processing yield
of donated food.
Entitlement means the value of donated foods a distributing agency is authorized to receive in a specific program, in accordance with program legislation.
Entitlement foods means donated foods
that USDA purchases and provides in
accordance with levels of assistance
mandated by program legislation.
FDPIR means the Food Distribution
Program on Indian Reservations and
the Food Distribution Program for Indian Households in Oklahoma.
Federal acceptance service means the
acceptance service provided by:
(1) The applicable grading branches
of the Department’s Agricultural Marketing Service (AMS);
(2) The Department’s Federal Grain
Inspection Service; and
(3) The National Marine Fisheries
Service of the U.S. Department of Commerce.
Fiscal year means the period of 12
months beginning October 1 of any calendar year and ending September 30 of
the following calendar year.
FNS means the Food and Nutrition
Service of the Department of Agriculture.
Food recall means an action to remove food products from commerce
when there is reason to believe the
products may be unsafe, adulterated,
or mislabeled. The action is taken to
protect the public from products that
may cause health problems or possible
death.
Food service management company
means a commercial enterprise, non-
profit organization, or public institution that is, or may be, contracted
with by a recipient agency to manage
any aspect of a recipient agency’s food
service, in accordance with 7 CFR part
210, 225, or 226, or, with respect to charitable institutions, in accordance with
this part. To the extent that such management includes the use of donated
foods, the food service management
company is subject to the applicable
requirements in this part. However, a
school food authority participating in
NSLP that performs such functions is
not considered a food service management company. Also, a commercial enterprise that uses donated foods to prepare meals at a commercial facility, or
to perform other activities that meet
the definition of processing in this section, is considered a processor in this
part, and is subject to the requirements in subpart C, and not subpart D,
of this part.
Household means any of the following
individuals or groups of individuals, exclusive of boarders or residents of an
institution:
(1) An individual living alone;
(2) An individual living with others,
but customarily purchasing food and
preparing meals for home consumption
separate and apart from the others;
(3) A group of individuals living together who customarily purchase and
prepare meals in common for home
consumption; and
(4) Other individuals or groups of individuals, as provided in FNS regulations specific to particular food assistance programs.
Household programs means CSFP,
FDPIR, and TEFAP.
In-kind replacement means the replacement of a loss of donated food
with the same type of food of U.S. origin, of equal or better quality as the
donated food, and at least equal in
value to the lost donated food.
In-State processing agreement means a
distributing agency’s agreement with
an in-State processor to process donated foods into finished end products
for sale to eligible recipient agencies or
for sale to the distributing agency.
In-State processor means a processor
that has entered into agreements with
distributing or recipient agencies that
are located only in the State in which
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Food and Nutrition Service, USDA
§ 250.2
all of the processor’s processing facilities are located.
Multi-food shipment means a shipment
from a Federal storage facility that
usually includes more than one type of
donated food.
Multi-State processor means a processor that has entered into agreements
with distributing or recipient agencies
in more than one State, or that has entered into one or more agreements
with distributing or recipient agencies
that are located in a State other than
the State in which the processor’s
processing facilities or business office
is located.
National per-meal value means the
value of donated foods provided for
each reimbursable lunch served in
NSLP in the previous school year, and
for each reimbursable lunch and supper
served in CACFP in the previous school
year, as established in sections 6(c) and
17(h)(1)(B) of the Richard B. Russell
National School Lunch Act ((42 U.S.C.
1755(c) and 1766(h)(1)(B)).
National processing agreement means
an agreement between FNS and a
multi-State processor to process donated foods into end products for sale
to distributing or recipient agencies.
Nonprofit organization means a private organization with tax-exempt status under the Internal Revenue Code.
Nonprofit organizations operated exclusively for religious purposes are
automatically tax-exempt under the
Internal Revenue Code.
Nonprofit school food service means all
food service operations conducted by
the school food authority principally
for the benefit of schoolchildren, all of
the revenue from which is used solely
for the operation or improvement of
such food services.
NSIP means the Nutrition Services
Incentive Program administered by the
DHHS ACL.
NSLP means the National School
Lunch Program.
Out-of-condition donated foods means
donated foods that are no longer fit for
human consumption as a result of
spoilage, contamination, infestation,
adulteration, or damage.
Performance supply and surety bond
means a written instrument issued by
a surety company which guarantees
performance and supply of end prod-
ucts by a processor under the terms of
a processing contract.
Processing means a commercial enterprise’s use of a commercial facility to:
(1) Convert donated foods into an end
product;
(2) Repackage donated foods; or
(3) Use donated foods in the preparation of meals.
Processor means a commercial enterprise that processes donated foods at a
commercial facility.
Recipient agencies means agencies or
organizations that receive donated
foods for distribution to eligible persons or for use in meals provided to eligible persons, in accordance with
agreements with a distributing or subdistributing agency, or with another
recipient agency. Local agencies in
CSFP, and Indian Tribal Organizations
distributing donated foods to eligible
persons through FDPIR in a State in
which the State government administers FDPIR, are considered recipient
agencies in this part.
Recipients means persons receiving
donated foods, or a meal containing donated foods, provided by recipient
agencies.
Recipient agency processing agreement
means a recipient agency’s agreement
with a processor to process donated
foods and to purchase the finished end
products.
Reimbursable meals means meals that
meet the nutritional standards established in Federal regulations pertaining to NSLP, SFSP, or CACFP, and
that are served to eligible recipients.
Replacement value means the price assigned by the Department to a donated
food which must reflect the current
price in the market to ensure compensation for donated foods lost in
processing or other activities. The replacement value may be changed by
the Department at any time.
SAE funds means Federal funds provided to State agencies for State administrative expenses, in accordance
with 7 CFR part 235.
SBP means the School Breakfast Program.
School food authority means the governing body responsible for the administration of one or more schools, and
that has the legal authority to operate
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§ 250.2
7 CFR Ch. II (1–1–22 Edition)
NSLP or be otherwise approved by FNS
to operate NSLP.
School year means the period of 12
months beginning July 1 of any calendar year and ending June 30 of the
following calendar year.
Section 4(a) means section 4(a) of the
Agriculture and Consumer Protection
Act of 1973 (7 U.S.C. 612c note), which
authorizes the Department to purchase
donated foods to maintain the traditional level of assistance for food assistance programs authorized by law,
including, but not limited to, CSFP,
FDPIR, and disaster assistance.
Section 6 means section 6 of the Richard B. Russell National School Lunch
Act (42 U.S.C. 1755), which authorizes
the Department to provide a specified
value of donated food assistance in
NSLP.
Section 14 means section 14 of the
Richard B. Russell National School
Lunch Act (42 U.S.C. 1762a), which authorizes the Department to use Section
32 or Section 416 funds to maintain the
annually programmed levels of donated
food assistance in child nutrition programs.
Section 27 means section 27 of the
Food and Nutrition Act of 2008 (7 U.S.C.
2036), which authorizes the purchase of
donated foods for distribution in
TEFAP.
Section 32 means section 32 of Public
Law 74–320 (7 U.S.C. 612c), which authorizes the Department to purchase
primarily perishable foods to remove
market surpluses, and to donate them
for use in domestic food assistance programs or by charitable institutions.
Section 311 means section 311 of the
Older Americans Act of 1965 (42 U.S.C.
3030a), which permits State Units on
Aging to receive all or part of their
NSIP grant as USDA donated foods.
Section 416 means section 416 of the
Agricultural Act of 1949 (7 U.S.C. 1431),
which authorizes the Department to
purchase nonperishable foods to support market prices, and to donate them
for use in domestic food assistance programs or by charitable institutions.
Section 709 means section 709 of the
Food and Agricultural Act of 1965 (7
U.S.C. 1446a–1), which authorizes the
Department to purchase dairy products
to meet authorized levels of assistance
in domestic food assistance programs
when such assistance cannot be met by
Section 416 food purchases.
Service institution means recipient
agencies that participate in SFSP.
SFSP means the Summer Food Service Program.
Similar replacement means the replacement of a loss of donated food
with another type of food from the
same food category (e.g., dairy, grain,
meat/meat alternate, vegetable, fruit,
etc.) that is of U.S. origin, of equal or
better quality than that type of donated food, and at least equal in value
to the lost donated food.
Single inventory management means
the commingling in storage of donated
foods and foods from other sources, and
the maintenance of a single inventory
record of such commingled foods.
Situation of distress means a natural
catastrophe or other event that does
not meet the definition of disaster in
this section, but that, in the determination of the distributing agency, or
of FNS, as applicable, warrants the use
of donated foods to assist survivors of
such catastrophe or other event. A situation of distress may include, for example, a hurricane, flood, snowstorm,
or explosion.
SNAP means the Supplemental Nutrition Assistance Program.
Split shipment means a shipment of
donated foods from a vendor that is
split between two or more distributing
or recipient agencies, and that usually
includes more than one stop-off or delivery location.
State means any State of the United
States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and
American Samoa.
State Participation Agreement means a
distributing agency’s agreement with a
multi-State processor to permit the
sale of finished end products produced
under the processor’s National Processing Agreement to eligible recipient
agencies in the State or to directly
purchase such finished end products.
State Unit on Aging means:
(1) The State agency that has been
approved by DHHS to administer NSIP;
or
(2) The Indian Tribal Organization
that has been approved by DHHS to administer NSIP.
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Food and Nutrition Service, USDA
§ 250.3
Storage facility means a publiclyowned or nonprofit facility or a commercial enterprise that stores donated
foods or end products, and that may
also transport such foods to another location.
Subdistributing agency means a State
agency, a public agency, or a nonprofit
organization selected by the distributing agency to perform one or more
activities required of the distributing
agency in this part, in accordance with
a written agreement between the parties. A subdistributing agency may
also be a recipient agency.
Substitution means:
(1) The replacement of donated foods
with like quantities of domestically
produced commercial foods of the same
generic identity and of equal or better
quality.
(2) A processor can substitute commercial product for donated food, as
described in paragraph (1) of this definition, without restrictions under full
substitution. The processor must return to the contracting agency, in finished end products, the same number of
pounds of donated food that the processor originally received for processing
under full substitution. This is the 100percent yield requirement.
(3) A processor can substitute commercial product for donated foods, as
described in paragraph (1) of this definition, with some restrictions under
limited substitution. Restrictions include, but are not limited to, the prohibition
against
substituting
for
backhauled poultry product. FNS may
also prohibit substitution of certain
types of the same generic food. (For example, FNS may decide to permit substitution for bulk chicken but not for
canned chicken.)
Summer camp means a nonprofit or
public camp for children aged 18 and
under.
TEFAP means The Emergency Food
Assistance Program.
USDA Foods means donated foods.
USDA implementing regulations mean
the following: 2 CFR part 400, Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program
Administrative Regulations for Grants
and Cooperative Agreements to State
and Local Governments; and 2 CFR
part 418, New Restrictions on Lobbying.
Vendor means a commercial food
company from which the Department
purchases foods for donation.
[81 FR 23100, Apr. 19, 2016, as amended at 83
FR 18926, May 1, 2018]
§ 250.3 Administration at the Federal
level.
(a) Food and Nutrition Service. Within
the Department, Food and Nutrition
Service (FNS) must act on behalf of the
Department to administer the distribution of donated foods to distributing
agencies for further distribution and
use at the State level, in accordance
with the requirements of this part.
(b) Audits or inspections. The Department, the Comptroller General of the
United States, or any of their authorized representatives, may conduct audits or inspections of distributing, subdistributing, or recipient agencies, or
the commercial enterprises with which
they have contracts or agreements, in
order to determine compliance with
the requirements of this part, or with
other applicable Federal regulations.
(c) Suspension or termination. Whenever it is determined that a distributing agency has materially failed to
comply with the provisions of this
part, or with other applicable Federal
regulations, FNS may suspend or terminate the distribution of donated
foods, or the provision of administrative funds, to the distributing agency.
FNS must provide written notification
of such suspension or termination of
assistance, including the reasons for
the action and the effective date. The
distributing agency may appeal a suspension or termination of assistance if
such appeal is provided for in Federal
regulations applicable to a specific
food assistance program (e.g., as provided for in § 253.5(l) of this chapter for
FDPIR). FNS may also take other actions, as appropriate, including prosecution under applicable Federal statutes.
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§ 250.4
7 CFR Ch. II (1–1–22 Edition)
§ 250.4 Administration at the State
level.
(a) Distributing agency. The distributing agency, as defined in § 250.2, is responsible for ensuring compliance with
the requirements in this part, and in
other Federal regulations referenced in
this part, in the distribution and control of donated foods. In order to receive, store, and distribute donated
foods, the distributing agency must
enter into a written agreement with
FNS (the Federal-State Agreement, form
FNS–74) for the distribution of donated
foods in accordance with the provisions
of this part and other applicable Federal regulations. The Federal-State
agreement is permanent, but may be
amended with the concurrence of both
parties. FNS may terminate the Federal-State agreement if the distributing agency fails to meet its obligations, in accordance with § 250.3(c).
Each distributing agency must also
provide adequate personnel to administer the program in accordance with
this part. The distributing agency may
impose additional requirements related
to the distribution and control of donated foods in the State, as long as
such requirements are not inconsistent
with the requirements in this part or
other Federal regulations referenced in
this part.
(b) Subdistributing agency. The distributing agency may enter into a
written agreement with a subdistributing agency, as defined in § 250.2, to
perform specific activities required of
the distributing agency in this part.
However, the distributing agency may
not assign its overall responsibility for
donated food distribution and control
to a subdistributing agency or to any
other organization, and may not delegate its responsibility to ensure compliance with the performance standards
in § 250.22. The agreement entered into
with the subdistributing agency must
include the provisions in paragraph (c)
of this section, and must indicate the
specific activities for which the subdistributing agency is responsible.
(c) Recipient agencies. The distributing agency must select recipient
agencies, as defined in § 250.2, to receive
donated foods for distribution to eligible persons, or for use in meals provided to eligible persons, in accordance
with eligibility criteria for specific
programs or outlets, and must enter
into a written agreement with a recipient agency prior to distribution of donated foods to it. However, for child
nutrition programs, the distributing
agency must enter into agreements
with those recipient agencies selected
by the State administering agency to
participate in such programs, prior to
distribution of donated foods to such
recipient agencies. The distributing
agency must confirm such recipient
agencies’ approval for participation in
the appropriate child nutrition program with the State administering
agency. For household programs, distributing agencies must consider the
past performance of recipient agencies
when approving applications for participation. Agreements with recipient
agencies must include the provisions in
this paragraph (c), as well as provisions
required in Federal regulations applicable to specific programs (e.g., agreements with local agencies in CSFP
must include the provisions in § 247.4(b)
of this chapter). The agreements with
recipient agencies and subdistributing
agencies must:
(1) Ensure compliance with the applicable requirements in this part, with
other Federal regulations referenced in
this part, and with the distributing
agency’s written agreement with FNS;
(2) Ensure compliance with all requirements relating to food safety and
food recalls;
(3) Establish the duration of the
agreement. The duration of the agreement may be established as permanent,
but may be amended at the initiation
of distributing agencies;
(4) Permit termination of the agreement by the distributing agency for
failure of the recipient agency (or subdistributing agency, as applicable) to
comply with its provisions or applicable requirements, upon written notification to the applicable party; and
(5) Permit termination of the agreement by either party, upon written notification to the other party, at least 60
days prior to the effective date of termination.
(d) Procurement of services of commercial enterprises. The distributing agency, or a recipient agency, must ensure
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Food and Nutrition Service, USDA
§ 250.11
compliance with procurement requirements in 2 CFR part 200, subpart D, and
USDA implementing regulations at 2
CFR parts 400 and 416, as applicable, to
obtain the services of a commercial enterprise to conduct activities relating
to donated foods. The distributing
agency, or a recipient agency, must
also ensure compliance with other applicable Departmental regulations in
such procurements—for example, a
school food authority must ensure
compliance with requirements in
§§ 210.16 and 210.21 of this chapter, and
in subpart D of this part, in procuring
the services of a food service management company.
§ 250.5
Civil rights.
Distributing agencies, subdistributing agencies and recipient agencies
must comply with the Department’s
nondiscrimination regulations (7 CFR
parts 15, 15a, and 15b) and the FNS civil
rights instructions to ensure that in
the operation of the program no person
is discriminated against on protected
bases as such bases apply to each program.
Subpart B—Delivery, Distribution,
and Control of Donated Foods
SOURCE: 81 FR 23104, Apr. 19, 2016, unless
otherwise noted.
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§ 250.10 Availability and ordering of
donated foods.
(a) Ordering donated foods. The distributing agency must utilize a request-driven ordering system in submitting orders for donated foods to
FNS. As part of such system, the distributing agency must provide recipient agencies with the opportunity to
submit input, on at least an annual
basis, in determining the donated foods
from the full list that are made available to them for ordering. Based on the
input received, the distributing agency
must ensure that the types and forms
of donated foods that recipient agencies may best utilize are made available to them for ordering. The distributing agency must also ensure that donated foods are ordered and distributed
only in amounts that may be utilized
efficiently and without waste.
(b) Provision of information on donated
foods. The distributing agency must
provide recipient agencies, at their request, information that will assist
them in ordering or utilization of donated foods, including information provided by USDA. Information provided
to recipient agencies must include:
(1) The types and quantities of donated foods that they may order;
(2) Donated food specifications and
nutritional value; and
(3) Procedures for the disposition of
donated foods that are out-of-condition
or that are subject to a food recall.
(c) Normal food expenditures. Section
416 donated foods must not be distributed to any recipient agencies or recipients whose normal food expenditures are reduced because of the receipt
of donated foods.
§ 250.11 Delivery and receipt of donated food shipments.
(a) Delivery. The Department arranges for delivery of donated foods
from the vendor or Federal storage facility to the distributing agency’s storage facility, or to a processor with
which the distributing agency has entered into a contract or agreement.
The Department may also deliver donated foods directly to a recipient
agency, or to a storage facility or processor with which the recipient agency
has entered into a contract or agreement, with the approval of the distributing agency. The Department will
make every reasonable effort to arrange deliveries of donated foods based
on information obtained from distributing agencies, to the extent feasible.
In accordance with § 250.2, an entity
that receives a shipment of donated
foods directly from a USDA vendor or a
Federal storage facility is referred to
as the consignee. Consignees must provide a delivery address, and other information as required by FNS, as well
as update this information as necessary, to ensure foods are delivered to
the correct location.
(b) Receipt of shipments. The distributing or recipient agency, or other consignee, must comply with all applicable Federal requirements in receiving
shipments of donated foods, including
procedures for the disposition of any
donated foods in a shipment that are
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§ 250.12
7 CFR Ch. II (1–1–22 Edition)
out-of-condition (as this term is defined in § 250.2), or are not in accordance with ordered amounts. The distributing or recipient agency, or other
consignee, must provide notification of
the receipt of donated food shipments
to FNS, through electronic means, and
must maintain an electronic record of
receipt of all donated food shipments.
(c) Replacement of donated foods. The
vendor is responsible for the replacement of donated foods that are delivered out-of-condition. Such responsibility extends until expiration of the
vendor warranty period included in the
vendor contract with USDA. In all
cases, responsibility for replacement is
contingent on the determination that
the foods were out-of-condition at the
time of delivery. Replacement must be
in-kind, unless FNS approves similar
replacement (the terms in-kind and
similar replacement are defined in
§ 250.2). If FNS determines that physical replacement of donated foods is
not cost-effective or efficient, FNS
may:
(1) Approve payment by the vendor to
the distributing or recipient agency, as
appropriate, for the value of the donated foods at time of delivery (or at
another value determined by FNS); or
(2) Credit the distributing agency’s
entitlement, as feasible.
(d) Payment of costs relating to shipments. The Department is responsible
for payment of processing, transportation, handling, or other costs incurred up to the time of delivery of donated foods to a distributing or recipient agency, or other consignee, as the
Department deems in its best interest.
However, the distributing or recipient
agency, or other consignee, is responsible for payment of any delivery
charges that accrue as a result of such
consignee’s failure to comply with procedures in FNS instructions—e.g., failure to provide for the unloading of a
shipment of donated foods within a designated time period.
(e) Transfer of title. In general, title to
donated foods transfers to the distributing agency or recipient agency, as
appropriate, upon acceptance of the donated foods at the time and place of delivery. Title to donated foods provided
to a multi-State processor, in accordance with its National Processing
Agreement, transfers to the distributing agency or recipient agency, as
appropriate, upon acceptance of the
finished end products at the time and
place of delivery. However, when a recipient agency has contracted with a
distributor to act as an authorized
agent, title to finished end products
containing donated foods transfers to
the recipient agency upon delivery and
acceptance by the contracted distributor. Notwithstanding transfer of
title, distributing and recipient agencies must ensure compliance with the
requirements of this part in the distribution, control, and use of donated
foods.
[81 FR 23100, Apr. 19, 2016, as amended at 83
FR 18927, May 1, 2018]
§ 250.12 Storage and inventory management at the distributing agency
level.
(a) Safe storage and control. The distributing agency or subdistributing
agency (which may include commercial
storage facilities under contract with
either the distributing agency or subdistributing agency, as applicable),
must provide facilities for the storage
and control of donated foods that protect against theft, spoilage, damage, or
other loss. Accordingly, such storage
facilities must maintain donated foods
in sanitary conditions, at the proper
temperature and humidity, and with
adequate air circulation. The distributing agency must ensure that storage
facilities comply with all Federal,
State, or local requirements relative to
food safety and health and procedures
for responding to a food recall, as applicable, and obtain all required health
inspections.
(b) Inventory management. The distributing agency must ensure that donated foods at all storage facilities
used by the distributing agency (or by
a subdistributing agency) are stored in
a manner that permits them to be distinguished from other foods, and must
ensure that a separate inventory
record of donated foods is maintained.
The distributing agency’s system of inventory management must ensure that
donated foods are distributed in a timely manner and in optimal condition. On
an annual basis, the distributing agency must conduct a physical review of
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Food and Nutrition Service, USDA
§ 250.12
donated food inventories at all storage
facilities used by the distributing agency (or by a subdistributing agency),
and must reconcile physical and book
inventories of donated foods. The distributing agency must report donated
food losses to FNS, and ensure that
restitution is made for such losses.
(c) Inventory limitations. The distributing agency is subject to the following
limitations in the amount of donated
food inventories on-hand, unless FNS
approval is obtained to maintain larger
inventories:
(1) For TEFAP, NSLP and other child
nutrition programs, inventories of each
category of donated food may not exceed an amount needed for a six-month
period, based on an average amount of
donated foods utilized in that period;
and
(2) For CSFP and FDPIR, inventories
of each category of donated food in the
food package may not exceed an
amount needed for a three-month period, based on an average amount of
donated food that the distributing
agency can reasonably utilize in that
period to meet CSFP caseload or
FDPIR average participation.
(d) Inventory protection. The distributing agency must obtain insurance to
protect the value of donated foods at
its storage facilities. The amount of
such insurance must be at least equal
to the average monthly value of donated food inventories at such facilities in the previous fiscal year. The distributing agency must also ensure that
the following entities obtain insurance
to protect the value of their donated
food inventories, in the same amount
required of the distributing agency in
this paragraph (d):
(1) Subdistributing agencies;
(2) Recipient agencies in household
programs that have an agreement with
the distributing agency or subdistributing agency to store and distribute
foods (except those recipient agencies
which maintain inventories with a
value of donated foods that do not exceed a defined threshold, as determined
in FNS policy); and
(3) Commercial storage facilities
under contract with the distributing
agency or with an agency identified in
paragraph (d)(1) or (2) of this section.
(e) Transfer of donated foods. The distributing agency may transfer donated
foods from its inventories to another
distributing agency, or to another program, in order to ensure that such
foods may be utilized in a timely manner and in optimal condition, in accordance with this part. However, the
distributing agency must request FNS
approval. FNS may also require a distributing agency to transfer donated
foods at the distributing agency’s storage facilities or at a processor’s facility, if inventories of donated foods are
excessive or may not be efficiently utilized. If there is a question of food safety, or if directed by FNS, the distributing agency must obtain an inspection of donated foods by State or local
health authorities, as necessary, to ensure that the donated foods are still
safe and not out-of-condition before
transferring them. The distributing
agency is responsible for meeting any
transportation or inspection costs incurred, unless it is determined by FNS
that the transfer is not the result of
negligence or improper action on the
part of the distributing agency. The
distributing agency must maintain a
record of all transfers from its inventories, and of any inspections related
to such transfers.
(f) Commercial storage facilities or carriers. The distributing agency may obtain the services of a commercial storage facility to store and distribute donated foods, or a carrier to transport
donated foods, but must do so in compliance with procurement requirements in 2 CFR part 200, subpart D, and
USDA implementing regulations at 2
CFR parts 400 and 416. The distributing
agency must enter into a written contract with a commercial storage facility or carrier, which may not exceed
five years in duration, including any
extensions or renewals. The contract
must include applicable provisions required by Federal statutes and executive orders listed in 2 CFR part 200, appendix II, Contract Provisions for NonFederal Entity Contracts Under Federal Awards, and USDA implementing
regulations at 2 CFR parts 400 and 416.
The contract must also include, as applicable to a storage facility or carrier,
provisions that:
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§ 250.13
7 CFR Ch. II (1–1–22 Edition)
(1) Assure storage, management, and
transportation of donated foods in a
manner that properly safeguards them
against theft, spoilage, damage, or
other loss, in accordance with the requirements in this part;
(2) Assure compliance with all Federal, State, or local requirements relative to food safety and health, including required health inspections, and
procedures for responding to a food recall;
(3) Assure storage of donated foods in
a manner that distinguishes them from
other foods, and assure separate inventory recordkeeping of donated foods;
(4) Assure distribution of donated
foods to eligible recipient agencies in a
timely manner, in optimal condition,
and in amounts for which such recipient agencies are eligible;
(5) Include the amount of insurance
coverage obtained to protect the value
of donated foods;
(6) Permit the performance of on-site
reviews of the storage facility by the
distributing agency, the Comptroller
General, the Department of Agriculture, or any of its duly authorized
representatives, in order to determine
compliance with requirements in this
part;
(7) Establish the duration of the contract, and provide for extension or renewal of the contract only upon fulfillment of all contract provisions;
(8) Provide for expeditious termination of the contract by the distributing agency for noncompliance with
its provisions; and
(9) Provide for termination of the
contract by either party for other
cause, after written notification of
such intent at least 60 days prior to the
effective date of such action.
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§ 250.13 Efficient and cost-effective
distribution of donated foods.
(a) Direct shipments. The distributing
agency must ensure that the distribution of donated foods is conducted in
the most efficient and cost-effective
manner, and, to the extent practical, in
accordance with the specific needs and
preferences of recipient agencies. In
meeting this requirement, the distributing agency must, to the extent practical, provide for:
(1) Shipments of donated foods directly from USDA vendors to recipient
agencies, including two or more recipient agencies acting as a collective unit
(such as a school co-op), or to the commercial storage facilities of such agencies;
(2) Shipments of donated foods directly from USDA vendors to processors for processing of donated foods
and sale of end products to recipient
agencies, in accordance with subpart C
of this part; and
(3) The use of split shipments, as defined in § 250.2, in arranging for delivery of donated foods to recipient agencies that cannot accept a full truckload.
(b) Distributing agency storage and distribution charge. (1) If a distributing
agency determines that direct shipments of donated foods, as described in
paragraph (a) of this section, are impractical, it must provide for the storage of donated foods at the distributing
agency level, and subsequent distribution to recipient agencies, in the most
efficient and cost-effective manner possible. The distributing agency must use
a commercial storage facility, in accordance with § 250.12(f), if the use of
such system is determined to be more
efficient and cost-effective than other
available methods.
(2) The distributing agency must utilize State Administrative Expense
(SAE) funds in child nutrition programs, as available, to meet the costs
of storing and distributing donated
foods for school food authorities or
other recipient agencies in child nutrition programs, and administrative
costs related to such activities, in accordance with 7 CFR part 235. If SAE
funds, or any other Federal or State
funds received for such purpose, are insufficient to fully meet the distributing agency’s costs of storing and distributing donated foods, and related
administrative costs (e.g., salaries of
employees engaged in such activities),
the distributing agency may require
school food authorities or other recipient agencies in child nutrition programs to pay a distribution charge, as
defined in § 250.2, to help meet such
costs. The distribution charge may
cover only allowable costs, in accordance with 2 CFR part 200, subpart E,
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Food and Nutrition Service, USDA
§ 250.14
and USDA implementing regulations at
2 CFR part 400. The distributing agency
must maintain a record of costs incurred in storing and distributing donated foods and related administrative
costs, and the source of funds used to
pay such costs.
(c) FNS approval of amount of State
distributing agency distribution charge to
school food authorities and other recipient
agencies in child nutrition programs. In
determining the amount of a new distribution charge, or in increasing the
amount (except for normal inflationary
adjustments) or reducing the level of
service provided once a distribution
charge is established, the distributing
agency must request FNS approval
prior to implementation. Such requirement also applies to the distribution
charge imposed by a commercial storage facility under contract with the
distributing agency. The request for
approval must be submitted to FNS at
least 90 days in advance of its projected
implementation, and must include justification of the newly established
amount, or any increased charge or reduction in the level of service provided
under an established distribution
charge, and the specific costs covered
under the distribution charge (e.g.,
storage, delivery, or administrative
costs).
(d) FNS review authority. FNS may reject the distributing agency’s proposed
new, or changes to an existing, distribution charge for school food authorities and other recipient agencies
in child nutrition programs if FNS determines that the charge would not
provide for distribution of donated
foods in the most efficient and cost-effective manner, or may otherwise impact recipient agencies negatively. In
such case, the distributing agency
would be required to adjust the proposed amount or the level of service
provided in its distribution charge, or
consider other distribution options.
FNS may also require the distributing
agency to submit documentation to
justify the efficiency and cost-effectiveness of its storage and distribution
system at other times, and may require
the distributing agency to re-evaluate
such system in order to ensure compliance with the requirements in this
part.
§ 250.14 Storage and inventory management at the recipient agency
level.
(a) Safe storage and control. Recipient
agencies must provide facilities for the
storage and control of donated foods
that protect against theft, spoilage,
damage, or other loss. Accordingly,
such storage facilities must maintain
donated foods in sanitary conditions,
at the proper temperature and humidity, and with adequate air circulation.
Recipient agencies must ensure that
storage facilities comply with all Federal, State, or local requirements relative to food safety and health and procedures for responding to a food recall,
as applicable, and obtain all required
health inspections.
(b) Inventory management—household
programs. Recipient agencies in household programs must store donated
foods in a manner that permits them to
be distinguished from other foods in
storage, and must maintain a separate
inventory record of donated foods.
Such recipient agencies’ system of inventory management must ensure that
donated foods are distributed to recipients in a timely manner that permits
use of such foods while still in optimal
condition. Such recipient agencies
must notify the distributing agency of
donated food losses and take further
actions with respect to such food
losses, as directed by the distributing
agency.
(c) Inventory management—child nutrition programs and charitable institutions.
Recipient agencies in child nutrition
programs, and those receiving donated
foods as charitable institutions, in accordance with § 250.67, are not required
to store donated foods in a manner
that distinguishes them from purchased foods or other foods, or to maintain a separate inventory record of donated foods—i.e., they may utilize single inventory management, as defined
in § 250.2. For such recipient agencies,
donated foods are subject to the same
safeguards and effective management
practices as other foods. Accordingly,
recipient agencies in child nutrition
programs and those receiving donated
foods as charitable institutions (regardless of the inventory management
system utilized), are not required to
separately monitor and report donated
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§ 250.15
7 CFR Ch. II (1–1–22 Edition)
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food use, distribution, or loss to the
distributing agency, unless there is evidence indicating that donated food loss
has occurred as a result of theft or
fraud.
(d) Transfer of donated foods to another
recipient agency. A recipient agency operating a household program must request approval from the distributing
agency to transfer donated foods at its
storage facilities to another recipient
agency. The distributing agency may
approve such transfer to another recipient agency in the same household
program (e.g., the transfer of TEFAP
foods from one food pantry to another)
without FNS approval. However, the
distributing agency must receive FNS
approval to permit a recipient agency
in a household program to transfer donated foods to a recipient agency in a
different program (e.g., the transfer of
TEFAP foods from a food pantry to a
CSFP local agency), even if the same
recipient agency administers both programs. A recipient agency operating a
child nutrition program, or receiving
donated foods as a charitable institution, in accordance with § 250.67, may
transfer donated foods to another recipient agency or charitable organization without approval from the distributing agency or FNS. However, the recipient agency must still maintain
records of donated food inventories.
(e) Commercial storage facilities. Recipient agencies may obtain the services of commercial storage facilities to
store and distribute donated foods, but
must do so in compliance with procurement requirements in 2 CFR part 200,
subpart D, and USDA implementing
regulations at 2 CFR parts 400 and 416,
as applicable. Recipient agencies must
ensure that commercial storage facilities comply with all of the applicable
requirements in this section regarding
the storage and inventory management
of donated foods.
§ 250.15 Out-of-condition
donated
foods, food recalls, and complaints.
(a) Out-of-condition donated foods at
the distributing agency level. The distributing agency must ensure that donated
foods that are out-of-condition, as defined in § 250.2, at any of its storage facilities are removed, destroyed, or otherwise disposed of, in accordance with
FNS instruction and State or local requirements pertaining to food safety
and health. The distributing agency
must obtain an inspection of donated
foods by State or local health authorities to determine their safety and condition, as necessary, or as directed by
FNS. Out-of-condition donated foods
may be sold (e.g., to a salvage company), if permitted by FNS and State
or local laws or regulations.
(b) Out-of-condition donated foods at
the recipient agency level. Recipient
agencies in household programs must
report out-of-condition donated foods
at their storage facilities to the distributing agency, in accordance with
§ 250.14(b), and must ensure that such
donated foods are removed, destroyed,
or otherwise disposed of, in accordance
with FNS instruction and State or
local requirements pertaining to food
safety and health. The distributing
agency must ensure that such recipient
agencies obtain an inspection of donated foods by State or local health authorities to determine their safety and
condition, as necessary, or as directed
by FNS. For charitable institutions, in
accordance with § 250.67, and recipient
agencies in child nutrition programs,
donated foods must be treated as other
foods when safety is in question. Consequently, such recipient agencies
must comply with State or local requirements in determining the safety
of foods (including donated foods), and
in their destruction or other disposition. However, they are not required to
report such actions to the distributing
agency.
(c) Food recalls. The distributing or
recipient agency, as appropriate, must
follow all applicable Federal, State or
local requirements for donated foods
subject to a food recall, as this term is
defined in § 250.2. Further, in the event
of a recall, Departmental guidance is
provided, including procedures or instructions for all parties in responding
to a food recall, replacement of recalled donated foods, and reimbursement of specific costs incurred as a result of such actions.
(d) Complaints relating to donated
foods. The distributing agency must inform recipient agencies of the preferred
method of receiving complaints regarding donated foods. Complaints received
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Food and Nutrition Service, USDA
§ 250.17
from recipients, recipient agencies, or
other entities relating to donated foods
must be resolved in an expeditious
manner, and in accordance with applicable requirements in this part. However, the distributing agency may not
dispose of any donated food that is the
subject of a complaint prior to guidance and authorization from FNS. Any
complaints regarding product quality
or specifications, or suggested product
improvements, must be submitted to
FNS through the established FNS donated foods complaint system for
tracking purposes. If complaints may
not be resolved at the State level, the
distributing agency must provide information regarding the complaint to
FNS. The distributing agency must
maintain a record of its investigations
and other actions with respect to complaints relating to donated foods.
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§ 250.16 Claims and restitution for donated food losses.
(a) Distributing agency responsibilities.
The distributing agency must ensure
that restitution is made for the loss of
donated foods, or for the loss or improper use of funds provided for, or obtained as an incident of, the distribution of donated foods. The distributing
agency must identify, and seek restitution from, parties responsible for the
loss, and implement corrective actions
to prevent future losses.
(b) FNS claim actions. FNS may initiate and pursue claims against the distributing agency or other entities for
the loss of donated foods, or for the
loss or improper use of funds provided
for, or obtained as an incident of, the
distribution of donated foods. FNS may
also initiate and pursue claims against
the distributing agency for failure to
take required claim actions against
other parties. FNS may, on behalf of
the Department, compromise, forgive,
suspend, or waive a claim. FNS may, at
its option, require assignment to it of
any claim arising from the distribution
of donated foods.
§ 250.17 Use of funds obtained incidental to donated food distribution.
(a) Distribution charge. The distributing agency must use funds obtained
from the distribution charge imposed
on recipient agencies in child nutrition
programs,
in
accordance
with
§ 250.13(b), to meet the costs of storing
and distributing donated foods or related administrative costs, consistent
with the limitations on the use of
funds provided under a Federal grant in
2 CFR part 200, subparts D and E, and
USDA implementing regulations at 2
CFR parts 400 and 416. The distributing
agency must maintain such funds in an
operating account, separate from other
funds obtained incidental to donated
food distribution. The amount of funds
maintained at any time in the operating account may not exceed the distributing agency’s highest expenditure
from that account over any threemonth period in the previous school or
fiscal year, unless the distributing
agency receives FNS approval to maintain a larger amount of funds in such
account. Unless such approval is granted, funds in excess of the established
limit must be used to reduce the distribution charge imposed on recipient
agencies, or to provide appropriate reimbursement to such agencies. The distributing agency may not use funds obtained from the distribution charge to
purchase foods to replace donated food
losses or to pay claims to make restitution for donated food losses.
(b) Processing and food service management company contracts. School food authorities must use funds obtained from
processors in processing of donated
foods into end products (e.g., through
rebates for the value of such donated
foods), or from food service management companies in crediting for the
value of donated foods received, in support of the nonprofit school food service, in accordance with § 210.14 of this
chapter. Other recipient agencies must
use such funds in accordance with the
requirements in paragraph (c) of this
section.
(c) Claims and other sources. The distributing agency must ensure that
funds collected in payment of claims
for donated food losses are used only
for the payment of expenses of the food
distribution program. The first priority
for the use of funds collected in a claim
for the loss of donated foods is the purchase of replacement foods for use in
the program in which the loss occurred. If the purchase of replacement
foods is not feasible, funds collected in
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§ 250.18
7 CFR Ch. II (1–1–22 Edition)
a claim for the loss of donated foods
must be used to pay allowable administrative costs incurred in the storage
and distribution of donated foods. The
distributing agency, or recipient agency, must use funds obtained from
sources incidental to donated food distribution (except as otherwise indicated in this section) to pay administrative costs incurred in the storage
and distribution of donated foods, consistent with the limitations on the use
of funds provided under a Federal grant
in 2 CFR part 200, subparts D and E,
and USDA implementing regulations at
2 CFR parts 400 and 416. The distributing agency must maintain funds obtained from claims and other sources
included in this paragraph (c) in a donated food account (separate from the
operating account maintained in accordance with paragraph (a) of this section), and must obtain FNS prior approval for any single deposit into, or
expenditure from, such account in excess of $25,000. Distributing and recipient agencies must maintain records of
funds obtained and expended in accordance with this paragraph (c). Examples
of funds applicable to the provisions in
this paragraph (c) include funds accrued from:
(1) The salvage of out-of-condition
donated foods.
(2) The sale of donated food containers, pallets, or packing materials.
(3) Payments by processors for failure to meet processing yields or other
cause.
(d) Prohibitions. The distributing
agency may not use funds obtained incidental to donated food distribution to
meet State matching requirements for
Federal administrative funds provided
in household programs, or in place of
State Administrative Expense (SAE)
funds provided in accordance with 7
CFR part 235.
(e) Buy American. When funds obtained in accordance with this section
are used to purchase foods in the commercial market, a distributing or recipient agency in the continental
United States, and in Hawaii, must, to
the maximum extent practical, purchase only domestic foods or food products. Such requirement is also applicable to food purchases made with the
cash-in-lieu-of-donated foods provided
in NSLP and CACFP, in accordance
with §§ 250.56(e) and 250.61(c). For the
purposes of this section, domestic foods
or food products are:
(1) Agricultural commodities that are
produced in the United States; or
(2) Food products that are processed
in the United States substantially
using agricultural commodities that
are produced in the United States.
§ 250.18 Reporting requirements.
(a) Inventory and distribution of donated foods. The distributing agency
must submit to FNS reports relating to
the inventory and distribution of donated foods in this paragraph (a) or in
other regulations applicable to specific
programs. Such reports must be submitted in accordance with the timeframes established for each respective
form. For donated foods received in
FDPIR, the distributing agency must
submit form FNS–152, Monthly Distribution of Donated Foods to Family Units.
For donated foods received in TEFAP,
NSLP, or other child nutrition programs, the distributing agency must
submit form FNS–155, the Inventory
Management Register.
(b) Processor performance. Processors
must submit performance reports and
other supporting documentation, as required by the distributing agency or by
FNS, in accordance with § 250.37(a), to
ensure compliance with requirements
in this part.
(c) Disasters and situations of distress.
The distributing agency must submit
to FNS a report of the types and
amounts of donated foods used from
distributing or recipient agency storage facilities in disasters and situations of distress, and a request for replacement of such foods, using electronic form FNS–292A, Report of Commodity Distribution for Disaster Relief, in
accordance with §§ 250.69 and 250.70. The
report must be submitted within 45
days of the termination of such assistance.
(d) Other information. The distributing agency must submit other information, as requested by FNS, in order
to ensure compliance with requirements in this part. For example, FNS
may require the distributing agency to
submit information with respect to its
assessment of the distribution charge,
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Food and Nutrition Service, USDA
§ 250.20
or to justify the efficiency and cost-effectiveness of its distribution system,
in accordance with § 250.13(c) and (d).
[81 FR 23100, Apr. 19, 2016, as amended at 83
FR 18927, May 1, 2018]
this period of time must be retained
until such actions have been resolved.
[81 FR 23100, Apr. 19, 2016, as amended at 83
FR 18927, May 1, 2018]
§ 250.20
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§ 250.19
Recordkeeping requirements.
(a) Required records. Distributing
agencies, recipient agencies, processors, and other entities must maintain records of agreements and contracts, reports, audits, and claim actions, funds obtained as an incident of
donated food distribution, and other
records specifically required in this
part or in other Departmental regulations, as applicable. In addition, distributing agencies must keep a record
of the value of donated foods each of its
school food authorities receives, in accordance with § 250.58(e), and records to
demonstrate compliance with the professional standards for distributing
agency
directors
established
in
§ 235.11(g) of this chapter. Processors
must also maintain records documenting the sale of end products to recipient agencies, including the sale of
such end products by distributors, and
must submit monthly performance reports, in accordance with subpart C of
this part and with any other recordkeeping requirements included in their
agreements. Specific recordkeeping requirements relating to the use of donated foods in contracts with food service management companies are included in § 250.54. Failure of the distributing agency, recipient agency, processor, or other entity to comply with
recordkeeping requirements must be
considered prima facie evidence of improper distribution or loss of donated
foods and may result in a claim against
such party for the loss or misuse of donated foods, in accordance with § 250.16,
or in other sanctions or corrective actions.
(b) Retention of records. Records relating to requirements for donated foods
must be retained for a period of three
years from the close of the fiscal or
school year to which they pertain.
However, records pertaining to claims
or audits that remain unresolved in
Audit requirements.
(a) Requirements for distributing and
recipient agencies. Audit requirements
for State or local government agencies
and nonprofit organizations that receive Federal awards or grants (including distributing and recipient agencies
under this part) are included in 2 CFR
part 200, subpart F and appendix XI,
Compliance Supplement, and USDA
implementing regulations at 2 CFR
part 400. In accordance with such regulations, the value of Federal grants or
awards expended in a fiscal year determine if the distributing or recipient
agency is required to obtain an audit in
that year. The value of donated foods
must be considered as part of the Federal grants or awards in determining if
an audit is required. FNS provides
guidance for distributing and recipient
agencies in valuing donated foods for
audit purposes, and in determining
whether an audit must be obtained.
(b) Requirements for processors. InState processors must obtain an independent certified public accountant
(CPA) audit in the first year that they
receive donated foods for processing,
while multi-State processors must obtain such an audit in each of the first
two years that they receive donated
foods for processing. After this initial
requirement
period,
in-State
and
multi-State processors must obtain an
independent CPA audit at a frequency
determined by the average value of donated foods received for processing per
year, as indicated in this paragraph (b).
The value of donated foods used in determining if an audit is required must
be the contract value of the donated
foods, as defined in § 250.2. The audit
must determine that the processor’s
performance is in compliance with the
requirements in this part, and must be
conducted in accordance with procedures in the FNS Audit Guide for Processors. All processors must pay for audits required in this paragraph (b). An
in-State or multi-State processor must
obtain an audit:
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§ 250.21
7 CFR Ch. II (1–1–22 Edition)
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(1) Annually, if it receives, on average, more than $5,000,000 in donated
foods for processing per year;
(2) Every two years, if it receives, on
average,
between
$1,000,000
and
$5,000,000 in donated foods for processing per year; or
(3) Every three years, if it receives,
on average, less than $1,000,000 in donated foods for processing per year.
(c) Post-audit actions required of processors. In-State processors must submit
a copy of the audit to the distributing
agency for review by December 31st of
each year in which an audit is required.
The distributing agency must ensure
that in-State processors provide a corrective action plan with timelines for
correcting deficiencies identified in the
audit, and must ensure that such deficiencies are corrected. Multi-State
processors must submit a copy of the
audit, and a corrective action plan
with timelines for correcting deficiencies identified in the audit, as appropriate, to FNS for review by December 31st of each year in which an audit
is required. FNS may conduct an audit
or investigation of a processor to ensure correction of deficiencies, in accordance with § 250.3(b).
(d) Failure to meet audit requirements.
If a distributing agency or recipient
agency fails to obtain the required
audit, or fails to correct deficiencies
identified in the audit, FNS may withhold, suspend, or terminate the Federal
award. If an in-State processor fails to
obtain the required audit, or fails to
correct deficiencies identified in the
audit, a distributing or recipient agency may terminate the processing agreement, and may not extend or renew
such an agreement. Additionally, FNS
may prohibit the further distribution
of donated foods to such processor. If a
multi-State processor fails to obtain a
required audit, or fails to correct deficiencies identified in the audit, FNS
may terminate the processing agreement. Additionally, FNS may prohibit
the further distribution of donated
foods to such processor.
§ 250.21 Distributing agency reviews.
(a) Scope of review requirements. The
distributing agency must ensure that
subdistributing
agencies,
recipient
agencies, and other entities comply
with applicable requirements in this
part, and in other Federal regulations,
through the on-site reviews required in
paragraph (b) of this section, and the
review of required reports or audits.
However, the distributing agency is not
responsible for the review of school
food authorities and other recipient
agencies in child nutrition programs.
The State administering agency is responsible for the review of such recipient agencies, in accordance with review
requirements of part 210 of this chapter.
(b) On-site reviews. The distributing
agency must conduct an on-site review
of:
(1) Charitable institutions, whenever
the distributing agency identifies actual or probable deficiencies in the use
of donated foods by such institutions,
through audits, investigations, complaints, or any other information;
(2) Storage facilities at the distributing agency level (including commercial storage facilities under contract
with the distributing or subdistributing agency), on an annual basis; and
(3) Subdistributing and recipient
agencies in CSFP, TEFAP, and FDPIR,
in accordance with 7 CFR parts 247, 251,
and 253, respectively.
(c) Identification and correction of deficiencies. The distributing agency must
inform each subdistributing agency, recipient agency, or other entity of any
deficiencies identified in its reviews,
and recommend specific actions to correct such deficiencies. The distributing
agency must ensure that such agencies
or entities implement corrective actions to correct deficiencies in a timely
manner.
§ 250.22 Distributing agency performance standards.
(a) Performance standards. The distributing agency must meet the basic
performance standards included in this
paragraph (a) in the ordering, distribution, processing, if applicable, and control of donated foods. Some of the performance standards apply only to distributing agencies that distribute donated foods in NSLP or other child nutrition programs, as indicated. However, the identification of specific performance standards does not diminish
the responsibility of the distributing
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Food and Nutrition Service, USDA
§ 250.30
agency to meet other requirements in
this part. In meeting basic performance
standards, the distributing agency
must:
(1) Provide recipient agencies with
information on donated food availability, assistance levels, values, product specifications, and processing options, as requested;
(2) Implement a request-driven ordering system, in accordance with
§ 250.10(a), and, for child nutrition programs, § 250.58(a);
(3) Offer school food authorities in
NSLP, at a minimum, the commodity
offer value of donated foods, in accordance with § 250.58;
(4) Provide for the storage, distribution, and control of donated foods in
accordance with all Federal, State, or
local requirements relating to food
safety and health;
(5) Provide for the distribution of donated foods in the most efficient and
cost-effective manner, including, to the
extent practical, direct shipments from
vendors to recipient agencies or processors, and the use of split shipments;
(6) Use SAE funds, or other Federal
or State funds, as available, in paying
State storage and distribution costs for
child nutrition programs, and impose a
distribution charge on recipient agencies in child nutrition programs only
to the extent that such funds are insufficient to meet applicable costs;
(7) Provide for the processing of donated foods, at the request of school
food authorities, in accordance with
subpart C of this part, including the
testing of end products with school
food authorities, and the solicitation of
acceptability input, when procuring
end products on behalf of school food
authorities or otherwise limiting the
procurement of end products; and
(8) Provide recipient agencies information regarding the preferred method
for submission of donated foods complaints to the distributing agency and
act expeditiously to resolve submitted
complaints.
(b) Corrective action plan. The distributing agency must submit a corrective
action plan to FNS whenever it is
found to be substantially out of compliance with the performance standards
in paragraph (a) of this section, or with
other requirements in this part. The
plan must identify the corrective actions to be taken, and the timeframe
for completion of such actions. The
plan must be submitted to FNS within
60 days after the distributing agency
receives notification from FNS of a deficiency.
(c) Termination or suspension. FNS
may terminate or suspend all, or part,
of the distributing agency’s participation in the distribution of donated
foods, or in a food distribution program, for failure to comply with requirements in this part, with other applicable Federal regulations, or with
its written agreement with FNS. FNS
may also take other actions, as appropriate, including prosecution under applicable Federal statutes.
Subpart C—Processing of Donated
Foods
SOURCE: 83 FR 18927, May 1, 2018, unless
otherwise noted.
§ 250.30 Processing of donated foods
into end products.
(a) Purpose of processing donated foods.
Donated foods are most commonly provided to processors to process into approved end products for use in school
lunch programs or other food services
provided by recipient agencies. The
ability to divert donated foods for processing provides recipient agencies with
more options for using donated foods in
their programs. For example, donated
foods such as whole chickens or chicken parts may be processed into
precooked grilled chicken strips for use
in the National School Lunch Program.
In some cases, donated foods are provided to processors to prepare meals or
for repackaging. Use of a commercial
facility to repackage donated foods, or
to use donated foods in the preparation
of meals, is considered processing in
this part.
(b) Agreement requirement. The processing of donated foods must be performed in accordance with an agreement between the processor and FNS,
between the processor and the distributing agency, or, if allowed by the distributing agency, between the processor and a recipient agency or subdistributing agency. However, a processing agreement will not obligate any
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§ 250.30
7 CFR Ch. II (1–1–22 Edition)
party to provide donated foods to a
processor for processing. The agreements described below are required in
addition to, not in lieu of, competitively procured contracts required in
accordance with § 250.31. The processing
agreement must be signed by an authorized individual for the processor.
The different types of processing agreements are described in this section.
(c) National Processing Agreement. A
multi-State processor must enter into
a National Processing Agreement with
FNS in order to process donated foods
into end products in accordance with
end product data schedules approved by
FNS. FNS also holds and manages such
processor’s performance bond or letter
of credit under its National Processing
Agreement, in accordance with § 250.32.
FNS does not itself procure or purchase
end products under a National Processing Agreement. A multi-State processor must also enter into a State Participation Agreement with the distributing agency in order to sell nationally
approved end products in the State, in
accordance with paragraph (d) of this
section.
(d) State Participation Agreement. The
distributing agency must enter into a
State Participation Agreement with a
multi-State processor to permit the
sale of end products produced under the
processor’s National Processing Agreement to eligible recipient agencies in
the State or to directly purchase such
end products. The distributing agency
may include other State-specific processing requirements in its State Participation Agreement, such as the
methods of end product sales permitted, in accordance with § 250.36, or
the use of labels attesting to fulfillment of meal pattern requirements in
child nutrition programs. The distributing agency must utilize the following
criteria in its selection of processors
with which it enters into agreements.
These criteria will be reviewed by the
appropriate FNS Regional Office during the management evaluation review
of the distributing agency.
(1) The nutritional contribution provided by end products;
(2) The marketability or acceptability of end products;
(3) The means by which end products
will be distributed;
(4) Price competitiveness of end products and processing yields of donated
foods;
(5) Any applicable labeling requirements; and
(6) The processor’s record of ethics
and integrity, and capacity to meet
regulatory requirements.
(e) In-State Processing Agreement. A
distributing agency must enter into an
In-State Processing Agreement with an
in-State processor to process donated
foods into finished end products, unless
it permits recipient agencies to enter
into Recipient Agency Processing
Agreements for such purpose, in accordance with paragraph (f) of this section. Under an In-State Processing
Agreement, the distributing agency approves end product data schedules (except red meat and poultry) submitted
by the processor, holds and manages
the processor’s performance bond or
letter of credit, in accordance with
§ 250.32, and assures compliance with
other processing requirements. The distributing agency may also purchase
the finished end products for distribution to eligible recipient agencies in
the State under an In-State Processing
Agreement, or may permit recipient
agencies to purchase such end products, in accordance with applicable
procurement requirements. In the latter case, the In-State Processing
Agreement is often called a ‘‘master
agreement.’’ A distributing agency
that procures end products on behalf of
recipient agencies, or that limits recipient agencies’ access to the procurement of specific end products through
its master agreements, must utilize the
following criteria in its selection of
processors with which it enters into
agreements. These criteria will be reviewed by the appropriate FNS Regional Office during the management
evaluation review of the distributing
agency.
(1) The nutritional contribution provided by end products;
(2) The marketability or acceptability of end products;
(3) The means by which end products
will be distributed;
(4) Price competitiveness of end products and processing yields of donated
foods;
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Food and Nutrition Service, USDA
§ 250.31
(5) Any applicable labeling requirements; and
(6) The processor’s record of ethics
and integrity, and capacity to meet
regulatory requirements.
(f) Recipient Agency Processing Agreement. The distributing agency may permit a recipient agency to enter into an
agreement with an in-State processor
to process donated foods and to purchase the finished end products in accordance with a Recipient Agency
Processing Agreement. A recipient
agency may also enter into a Recipient
Agency Processing Agreement on behalf of other recipient agencies, in accordance with an agreement between
the parties. The distributing agency
may also delegate a recipient agency
to approve end product data schedules
or select nationally approved end product data schedules, review in-State
processor performance reports, manage
the performance bond or letter of credit of an in-State processor, and monitor other processing activities under a
Recipient Agency Processing Agreement. All such activities must be performed in accordance with the requirements of this part. All Recipient Agency Processing Agreements must be reviewed and approved by the distributing agency. All recipient agencies
must utilize the following criteria in
its selection of processors with which
it enters into agreements:
(1) The nutritional contribution provided by end products;
(2) The marketability or acceptability of end products;
(3) The means by which end products
will be distributed;
(4) Price competitiveness of end products and processing yields of donated
foods;
(5) Any applicable labeling requirements; and
(6) The processor’s record of ethics
and integrity, and capacity to meet
regulatory requirements.
(g) Ensuring acceptability of end products. A distributing agency that procures end products on behalf of recipient agencies, or that otherwise limits
recipient agencies’ access to the procurement of specific end products,
must provide for testing of end products to ensure their acceptability by
recipient agencies, prior to entering
into processing agreements. End products that have previously been tested,
or that are otherwise determined to be
acceptable, need not be tested. However, such a distributing agency must
monitor product acceptability on an
ongoing basis.
(h) Prohibition against subcontracting.
A processor may not assign any processing activities under its processing
agreement or subcontract to another
entity to perform any aspect of processing, without the specific written
consent of the other party to the agreement (i.e., distributing or recipient
agency, or FNS, as appropriate). The
distributing agency may, for example,
provide the required consent as part of
its State Participation Agreement or
In-State Processing Agreement with
the processor.
(i) Agreements between processors and
distributors. A processor providing end
products containing donated foods to a
distributor must enter into a written
agreement with the distributor. The
agreement must reference, at a minimum, the financial liability (i.e., who
must pay) for the replacement value of
donated foods, not less than monthly
end product sales reporting frequency,
requirements under § 250.11, and the applicable value pass through system to
ensure that the value of donated foods
and finished end products are properly
credited to recipient agencies. Distributing agencies can set additional requirements.
(j) Duration of agreements. In-State
Processing Agreements and Recipient
Agency Processing Agreements may be
up to five years in duration. State Participation Agreements may be permanent. National Processing Agreements
are permanent. Amendments to any
agreements may be made, as needed,
with the concurrence of both parties to
the agreement. Such amendments will
be effective for the duration of the
agreement, unless otherwise indicated.
§ 250.31 Procurement requirements.
(a) Applicability of Federal procurement
requirements. Distributing and recipient
agencies must comply with the requirements in 2 CFR part 200 and part 400, as
applicable, in purchasing end products,
distribution, or other processing services from processors. Distributing and
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§ 250.32
7 CFR Ch. II (1–1–22 Edition)
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recipient agencies may use procurement procedures that conform to applicable State or local laws and regulations, but must ensure compliance with
the procurement requirements in 2
CFR part 200 and part 400, as applicable.
(b) Required information in procurement documents. In all procurements of
processed end products containing
USDA donated foods, procurement documents must include the following information:
(1) The price to be charged for the
end product or other processing service;
(2) The method of end product sales
that will be utilized and assurance that
crediting for donated foods will be performed in accordance with the applicable requirements for such method of
sales in § 250.36;
(3) The value of the donated food in
the end products; and
(4) The location for the delivery of
the end products.
§ 250.32 Protection of donated food
value.
(a) Performance bond or irrevocable letter of credit. The processor must obtain
a performance bond or an irrevocable
letter of credit to protect the value of
donated foods to be received for processing prior to the delivery of the donated foods to the processor. The processor must provide the performance
bond or letter of credit to the distributing or recipient agency, in accordance with its In-State or Recipient
Agency Processing Agreement. However, a multi-State processor must provide the performance bond or letter of
credit to FNS, in accordance with its
National Processing Agreement. For
multi-State processors, the minimum
amount of the performance bond or letter of credit must be sufficient to cover
at least 75 percent of the value of donated foods in the processor’s physical
or book inventory, as determined annually and at the discretion of FNS for
processors under National Processing
Agreements. For multi-state processors in their first year of participation in the processing program, the
amount of the performance bond or letter of credit must be sufficient to cover
100 percent of the value of donated
foods, as determined annually, and at
the discretion of FNS. The surety company from which a bond is obtained
must be listed in the most current Department of Treasury’s Listing of Approved Sureties (Department Circular
570).
(b) Calling in the performance bond or
letter of credit. The distributing or recipient agency must call in the performance bond or letter of credit whenever a processor’s lack of compliance
with this part, or with the terms of the
In-State or Recipient Agency Processing Agreement, results in a loss of
donated foods to a distributing or recipient agency and the processor fails
to make restitution or respond to a
claim action initiated to recover the
loss. Similarly, FNS will call in the
performance bond or letter of credit in
the same circumstances, in accordance
with National Processing Agreements,
and will ensure that any monies recovered are reimbursed to distributing
agencies for losses of entitlement
foods.
§ 250.33 Ensuring processing yields of
donated foods.
(a) End product data schedules. The
processor must submit an end product
data schedule, in a standard electronic
format dictated by FNS, for approval
before it may process donated foods
into end products. For In-State Processing Agreements, the end product
data schedule must be approved by the
distributing agency and, for products
containing donated red meat and poultry, the end product data schedule
must also be approved by the Department. For National Processing Agreements, the end product data schedule
must be approved by the Department.
An end product data schedule must be
submitted, and approved, for each new
end product that a processor wishes to
provide or for a previously approved
end product in which the ingredients
(or other pertinent information) have
been altered. On the end product data
schedule, the processor must describe
its processing of donated food into an
end product, including the following information:
(1) A description of the end product;
(2) The types and quantities of donated foods included;
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Food and Nutrition Service, USDA
§ 250.33
(3) The types and quantities of other
ingredients included;
(4) The quantity of end product produced; and
(5) The processing yield of donated
food, which may be expressed as the
quantity (pounds or cases) of donated
food needed to produce a specific quantity of end product or as the percentage of raw donated food versus the
quantity returned in the finished end
product.
(b) Processing yields of donated foods.
All end products must have a processing yield of donated foods associated
with its production and this processing
yield must be indicated on its end product data schedule. The processing yield
options are limited to 100 percent yield,
guaranteed yield, and standard yield.
(1) Under 100 percent yield, the processor must ensure that 100 percent of
the raw donated food is returned in the
finished end product. The processor
must replace any processing loss of donated food with commercially purchased food of the same generic identity, of U.S. origin, and equal or better
in all USDA procurement specifications than the donated food. The processor must demonstrate such replacement by reporting reductions in donated food inventories on performance
reports by the amount of donated food
contained in the finished end product
rather than the amount that went into
production. The Department may approve an exception if a processor experiences a significant manufacturing
loss.
(2) Under guaranteed yield, the processor must ensure that a specific quantity of end product (i.e., number of
cases) will be produced from a specific
quantity of donated food (i.e., pounds),
as determined by the parties to the
processing agreement, and, for In-State
Processing Agreements, approved by
the Department. If necessary, the processor must use commercially purchased
food of the same generic identity, of
U.S. origin, and equal or better in all
USDA procurement specifications than
the donated food to provide the guaranteed number of cases of end product to
the distributing or recipient agency, as
appropriate. The guaranteed yield
must be indicated on the end product
data schedule.
(3) Under standard yield, the processor must ensure that a specific quantity of end product (i.e., number of
cases), as determined by the Department, will be produced from a specific
quantity of donated food. The established standard yield is higher than the
yield the processor could achieve under
normal commercial production and
serves to reward those processors that
can process donated foods most efficiently. If necessary, the processor
must use commercially purchased food
of the same generic identity, of U.S. origin, and equal or better in all USDA
procurement specifications than the
donated food to provide the number of
cases required to meet the standard
yield to the distributing or recipient
agency, as appropriate. The standard
yield must be indicated on the end
product data schedule.
(c) Compensation for loss of donated
foods. The processor must compensate
the distributing or recipient agency, as
appropriate, for the loss of donated
foods, or for the loss of commercially
purchased foods substituted for donated foods. Such loss may occur, for
example, if the processor fails to meet
the required processing yield of donated food or fails to produce end products that meet required specifications,
if donated foods are spoiled, damaged,
or otherwise adulterated at a processing facility, or if end products are
improperly distributed. To compensate
for such loss, the processor must:
(1) Replace the lost donated food or
commercial substitute with commercially purchased food of the same generic identity, of U.S. origin, and equal
or better in all USDA procurement
specifications than the donated food; or
(2) Return end products that are
wholesome but do not meet required
specifications to production for processing into the requisite quantity of
end products that meet the required
specifications (commonly called rework products); or
(3) If the purchase of replacement
foods or the reprocessing of products
that do not meet the required specifications is not feasible, the processor
may, with FNS, distributing agency, or
recipient agency approval, dependent
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§ 250.34
7 CFR Ch. II (1–1–22 Edition)
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on which entity maintains the agreement with the processor, pay the distributing or recipient agency, as appropriate, for the replacement value of the
donated food or commercial substitute.
(d) Credit for sale of by-products. The
processor must credit the distributing
or recipient agency, as appropriate, for
the sale of any by-products produced in
the processing of donated foods. The
processor must credit for the net value
of such sale, or the market value of the
by-products, after subtraction of any
documented expenses incurred in preparing the by-product for sale. Crediting must be achieved through invoice
reduction or by another means of crediting.
(e) Labeling requirements. The processor must ensure that all end product
labels meet Federal labeling requirements. A processor that claims end
products fulfill meal pattern requirements in child nutrition programs
must comply with the procedures required for approval of labels of such
end products.
§ 250.34 Substitution of donated foods.
(a) Substitution of commercially purchased foods for donated foods. Unless
its agreement specifically stipulates
that the donated foods must be used in
processing, the processor may substitute commercially purchased foods
for donated foods that are delivered to
it from a USDA vendor. The commercially purchased food must be of the
same generic identity, of U.S. origin,
and equal or better in all USDA procurement specifications than the donated food. Commercially purchased
beef, pork, or poultry must meet the
same specifications as donated product, including inspection, grading, testing, and humane handling standards
and must be approved by the Department in advance of substitution. The
processor may choose to make the substitution before the actual receipt of
the donated food. However, the processor assumes all risk and liability if,
due to changing market conditions or
other reasons, the Department’s purchase of donated foods and their delivery to the processor is not feasible.
Commercially purchased food substituted for donated food must meet
the same processing yield requirements
in § 250.33 that would be required for
the donated food.
(b) Prohibition against substitution and
other requirements for backhauled donated foods. The processor may not substitute or commingle donated foods
that are backhauled to it from a distributing or recipient agency’s storage
facility. The processor must process
backhauled donated foods into end
products for sale and delivery to the
distributing or recipient agency that
provided them and not to any other
agency. Distributing or recipient agencies must purchase end products utilizing donated foods backhauled to
their contracted processor. The processor may not provide payment for
backhauled donated foods in lieu of
processing.
(c) Grading requirements. The processing of donated beef, pork, and poultry must occur under Federal Quality
Assessment Division grading, which is
conducted by the Department’s Agricultural Marketing Service. Federal
Quality Assessment Division grading
ensures that processing is conducted in
compliance with substitution and yield
requirements and in conformance with
the end product data schedule. The
processor is responsible for paying the
cost of acceptance service grading. The
processor must maintain grading certificates and other records necessary to
document compliance with requirements for substitution of donated foods
and with other requirements of this
subpart.
(d) Waiver of grading requirements. The
distributing agency may waive the
grading requirement for donated beef,
pork or poultry in accordance with one
of the conditions listed in this paragraph (d). However, grading may only
be waived on a case by case basis (e.g.,
for a particular production run); the
distributing agency may not approve a
blanket waiver of the requirement. Additionally, a waiver may only be granted if a processor’s past performance indicates that the quality of the end
product will not be adversely affected.
The conditions for granting a waiver
include:
(1) That even with ample notification
time, the processor cannot secure the
services of a grader;
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Food and Nutrition Service, USDA
§ 250.35
(2) The cost of the grader’s service in
relation to the value of donated beef,
pork or poultry being processed would
be excessive; or
(3) The distributing or recipient
agency’s urgent need for the product
leaves insufficient time to secure the
services of a grader.
(e) Use of substituted donated foods.
The processor may use donated foods
that have been substituted with commercially purchased foods in other
processing activities conducted at its
facilities.
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§ 250.35 Storage, food safety, quality
control, and inventory management.
(a) Storage and quality control. The
processor must ensure the safe and effective storage of donated foods, including compliance with the general
storage requirements in § 250.12, and
must maintain an effective quality
control system at its processing facilities. The processor must maintain documentation to verify the effectiveness
of its quality control system and must
provide such documentation upon request.
(b) Food safety requirements. The processor must ensure that all processing
of donated foods is conducted in compliance with all Federal, State, and
local requirements relative to food
safety.
(c) Commingling of donated foods and
commercially purchased foods. The processor may commingle donated foods
and commercially purchased foods, unless the processing agreement specifically stipulates that the donated foods
must be used in processing, and not
substituted, or the donated foods have
been backhauled from a recipient agency. However, such commingling must
be performed in a manner that ensures
the safe and efficient use of donated
foods, as well as compliance with substitution requirements in § 250.34 and
with reporting of donated food inventories on performance reports, as required in § 250.37. The processor must
also ensure that commingling of processed end products and other food products, either at its facility or at the facility of a commercial distributor, ensures the sale and delivery of end products that meet the processing require-
ments in this subpart—e.g., by affixing
the applicable USDA certification
stamp to the exterior shipping containers of such end products.
(d) Limitation on donated food inventories. Inventories of donated food at
processors may not be in excess of a
six-month supply, based on an average
amount of donated foods utilized, unless a higher level has been specifically
approved by the distributing agency on
the basis of a written justification submitted by the processor. Distributing
agencies are not permitted to submit
food orders for processors reporting no
sales activity during the prior year’s
contract period unless documentation
is submitted by the processor which
outlines specific plans for donated food
drawdown, product promotion, or sales
expansion. When inventories are determined to be excessive for a State or
processor, e.g., more than six months
or exceeding the established protection, FNS may require the transfer of
inventory and/or entitlement to another State or processor to ensure utilization prior to the end of the school
year.
(e) Reconciliation of excess donated
food inventories. If, at the end of the
school year, the processor has donated
food inventories in excess of a sixmonth supply, the distributing agency
may, in accordance with paragraph (d)
of this section, permit the processor to
carry over such excess inventory into
the next year of its agreement, if it determines that the processor may efficiently store and process such quantity
of donated foods. The distributing
agency may also direct the processor
to transfer such donated foods to other
recipient agencies, or to transfer them
to other distributing agencies, in accordance with § 250.12(e). However, if
these actions are not practical, the distributing agency must require the
processor to pay it for the donated
foods held in excess of allowed levels at
the replacement value of the donated
foods.
(f) Disposition of donated food inventories upon agreement termination. When
an agreement terminates, and is not
extended or renewed, the processor
must take one of the actions indicated
in this paragraph (f) with respect to remaining donated food inventories, as
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§ 250.36
7 CFR Ch. II (1–1–22 Edition)
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directed by the distributing agency or
recipient agency, as appropriate. The
processor must pay the cost of transporting any donated foods when the
agreement is terminated at the processor’s request or as a result of the
processor’s failure to comply with the
requirements of this part. The processor must:
(1) Return the donated foods, or commercially purchased foods that meet
the
substitution
requirements
in
§ 250.34, to the distributing or recipient
agency, as appropriate; or
(2) Transfer the donated foods, or
commercially purchased foods that
meet the substitution requirements in
§ 250.34, to another distributing or recipient agency with which it has a
processing agreement; or
(3) If returning or transferring the
donated foods, or commercially purchased foods that meet the substitution requirements in § 250.34, is not
feasible, the processor may, with FNS
approval, pay the distributing or recipient agency, as appropriate, for the
donated foods, at the contract value or
replacement value of the donated
foods, whichever is higher.
§ 250.36 End product sales and crediting for the value of donated foods.
(a) Methods of end product sales. To
ensure that the distributing or recipient agency, as appropriate, receives
credit for the value of donated foods
contained in end products, the sale of
end products must be performed using
one of the methods of end product
sales, also known as value pass through
systems, described in this section. All
systems of sales utilized must provide
clear documentation of crediting for
the value of the donated foods contained in the end products.
(b) Refund or rebate. Under this system, the processor sells end products to
the distributing or recipient agency, as
appropriate, at the commercial, or
gross, price and must provide a refund
or rebate for the value of the donated
food contained in the end products. The
processor may also deliver end products to a commercial distributor for
sale to distributing or recipient agencies under this system. In both cases,
the processor must provide a refund to
the appropriate agency within 30 days
of receiving a request for a refund from
that agency. The refund request must
be in writing, which may be transmitted via email or other electronic
submission.
(c) Direct discount. Under this system,
the processor must sell end products to
the distributing or recipient agency, as
appropriate, at a net price that incorporates a discount from the commercial case price for the value of donated
food contained in the end products.
(d) Indirect discount. Under this system, also known as net off invoice, the
processor delivers end products to a
commercial distributor, which must
sell the end products to an eligible distributing or recipient agency, as appropriate, at a net price that incorporates
a discount from the commercial case
price for the value of donated food contained in the end products. The processor must require the distributor to
notify it of such sales, at least on a
monthly basis, through automated
sales reports or other electronic or
written submission. The processor then
compensates the distributor for the
discount provided for the value of the
donated food in its sale of end products. Recipient agencies should closely
monitor invoices to ensure correct discounts are applied.
(e) Fee-for-service. (1) Under this system, the processor must sell end products to the distributing or recipient
agency, as appropriate, at a fee-forservice, which includes all costs to
produce the end products not including
the value of the donated food used in
production. Three basic types of feefor-service are used:
(i) Direct shipment and invoicing
from the processor to the recipient
agency;
(ii) Fee-for-service through a distributor, where the processor ships
multiple pallets of product to a distributor with a breakout of who owns
what products; and
(iii) What is commonly known as
Modified Fee-for-service, when the recipient agency has an authorized agent
bill them for the total case price.
(2) The processor must identify any
charge for delivery of end products separately from the fee-for-service on its
invoice. If the processor provides end
products sold under fee-for-service to a
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Food and Nutrition Service, USDA
§ 250.37
distributor for delivery to the distributing or recipient agency, the processor must identify the distributor’s
delivery charge separately from the
fee-for-service on its invoice to the appropriate agency or may permit the
distributor to bill the agency separately for the delivery of end products.
The processor must require that the
distributor notify it of such sales, at
least on a monthly basis, through automated sales reports, email, or other
electronic or written submission. When
the recipient agency procures storage
and distribution of processed end products separately from the processing of
donated foods, the recipient agency
may provide the distributor written approval to act as the recipient agency’s
authorized agent for the total case
price (i.e., including the fee-for-service
and the delivery charge), in accordance
with § 250.11(e).
(f) Approved alternative method. The
processor or distributor may sell end
products under an alternative method
approved by FNS and the distributing
agency that ensures crediting for the
value of donated foods contained in the
end products.
(g) Donated food value used in crediting. In crediting for the value of donated foods in end product sales, the
contract value of the donated foods, as
defined in § 250.2, must be used.
(h) Ensuring sale and delivery of end
products to eligible recipient agencies. In
order to ensure the sale of end products
to eligible recipient agencies, the distributing agency must provide the
processor with a list of recipient agencies eligible to purchase end products,
along with the quantity of raw donated
food that is to be delivered to the processor for processing on behalf of each
recipient agency. In order to ensure
that the distributor sells end products
only to eligible recipient agencies, the
processor must provide the distributor
with a list of eligible recipient agencies
and either:
(1) The quantities of approved end
products that each recipient agency is
eligible to receive; or
(2) The quantity of donated food allocated to each recipient agency and the
raw donated food (pounds or cases)
needed per case of each approved end
product.
§ 250.37 Reports, records, and reviews
of processor performance.
(a) Performance reports. The processor
must submit a performance report to
the distributing agency (or to the recipient agency, in accordance with a
Recipient Agency Processing Agreement) on a monthly basis, which must
include the information listed in this
paragraph (a). Performance reports
must be submitted not later than 30
days after the end of the reporting period. The performance report must include the following information for the
reporting period, with year-to-date totals:
(1) A list of all recipient agencies
purchasing end products;
(2) The quantity of donated foods in
inventory at the beginning of the reporting period;
(3) The quantity of donated foods received;
(4) The quantity of donated foods
transferred to the processor from another entity, or transferred by the
processor to another entity;
(5) The quantity of donated foods
losses;
(6) The quantity of end products delivered to each eligible recipient agency;
(7) The quantity of donated foods remaining at the end of the reporting period;
(8) A certification statement that
sufficient donated foods are in inventory or on order to account for the
quantities needed for production of end
products;
(9) Grading certificates, as applicable; and
(10) Other supporting documentation,
as required by the distributing agency
or recipient agency.
(b) Reporting reductions in donated
food inventories. The processor must report reductions in donated food inventories on performance reports only
after sales of end products have been
made, or after sales of end products
through distributors have been documented. However, when a recipient
agency has contracted with a distributor to act as an authorized agent,
the processor may report reductions in
donated food inventories upon delivery
and acceptance by the contracted distributor, in accordance with § 250.11(e).
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§ 250.37
7 CFR Ch. II (1–1–22 Edition)
Documentation of distributor sales
must be through the distributing or recipient agency’s request for a refund
(under a refund or rebate system) or
through receipt of the distributor’s
automated sales reports or other electronic or written reports submitted to
the processor (under an indirect discount system or under a fee-for-service
system).
(c) Summary performance report. Along
with the submission of performance reports to the distributing agency, a
multi-State processor must submit a
summary performance report to FNS,
on a monthly basis and in a format established by FNS, in accordance with
its National Processing Agreement.
The summary report must include an
accounting of the processor’s national
inventory of donated foods, including
the information listed in this paragraph (c). The report must be submitted not later than 30 days after the
end of the reporting period; however,
the final performance report must be
submitted within 60 days of the end of
the reporting period. The summary
performance report must include the
following information for the reporting
period:
(1) The total donated food inventory
by State and the national total at the
beginning of the reporting period;
(2) The total quantity of donated food
received by State, with year-to-date totals, and the national total of donated
food received;
(3) The total quantity of donated food
reduced from inventory by State, with
year-to-date totals, and the national
total of donated foods reduced from inventory; and
(4) The total quantity of donated
foods remaining in inventory by State,
and the national total, at the end of
the reporting period.
(d) Recordkeeping requirements for
processors. The processor must maintain the following records relating to
the processing of donated foods:
(1) End product data schedules and
summary end product data schedules,
as applicable;
(2) Receipt of donated foods shipments;
(3) Production, sale, and delivery of
end products, including sales through
distributors;
(4) All agreements with distributors;
(5) Remittance of refunds, invoices,
or other records that assure crediting
for donated foods in end products and
for sale of byproducts;
(6) Documentation of Federal or
State inspection of processing facilities, as appropriate, and of the maintenance of an effective quality control
system;
(7) Documentation of substitution of
commercial foods for donated foods, including grading certificates, as applicable;
(8) Waivers of grading requirements,
as applicable; and
(9) Required reports.
(e) Recordkeeping requirements for the
distributing agency. The distributing
agency must maintain the following
records relating to the processing of
donated foods:
(1) In-State Processing Agreements
and State Participation Agreements;
(2) End product data schedules or
summary end product data schedules,
as applicable;
(3) Performance reports;
(4) Grading certificates, as applicable;
(5) Documentation that supports information on the performance report,
as required by the distributing agency
(e.g., sales invoices or copies of refund
payments);
(6) Copies of audits of in-State processors and documentation of the correction of any deficiencies identified in
such audits;
(7) The receipt of end products, as applicable; and
(8) Procurement documents, as applicable.
(f) Recordkeeping requirements for the
recipient agency. The recipient agency
must maintain the following records
relating to the processing of donated
foods:
(1) The receipt of end products purchased from processors or distributors;
(2) Crediting for the value of donated
foods contained in end products;
(3) Recipient Agency Processing
Agreements, as applicable, and, in accordance with such agreements, other
records included in paragraph (e) of
this section, if not retained by the distributing agency; and
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Food and Nutrition Service, USDA
§ 250.38
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(4) Procurement documents, as applicable.
(g) Review requirements for the distributing agency. The distributing agency
must review performance reports and
other records that it must maintain, in
accordance with the requirements in
paragraph (e) of this section, to ensure
that the processor:
(1) Receives donated food shipments;
(2) Delivers end products to eligible
recipient agencies, in the types and
quantities for which they are eligible;
(3) Meets the required processing
yields for donated foods; and
(4) Accurately reports donated food
inventory activity and maintains inventories within approved levels.
§ 250.38 Provisions of agreements.
(a) National Processing Agreement. A
National Processing Agreement includes provisions to ensure that a
multi-State processor complies with
all of the applicable requirements in
this part relating to the processing of
donated foods.
(b) Required provisions for State Participation Agreement. A State Participation Agreement with a multi-State
processor must include the following
provisions:
(1) Contact information for all appropriate parties to the agreement;
(2) The effective dates of the agreement;
(3) A list of recipient agencies eligible to receive end products;
(4) Summary end product data schedules, with end products that may be
sold in the State;
(5) Assurance that the processor will
not
substitute
or
commingle
backhauled donated foods and will provide end products processed from such
donated foods only to the distributing
or recipient agency from which the
foods were received;
(6) Any applicable labeling requirements;
(7) Other processing requirements implemented by the distributing agency,
such as the specific method(s) of end
product sales permitted;
(8) A statement that the agreement
may be terminated by either party
upon 30 days’ written notice;
(9) A statement that the agreement
may be terminated immediately if the
processor has not complied with its
terms and conditions; and
(10) A statement requiring the processor to enter into an agreement with
any and all distributors delivering
processed end products to recipient
agencies that ensures adequate data
sharing, reporting, and crediting of donated foods, in accordance with
§ 250.30(i).
(c) Required provisions of the In-State
Processing Agreement. An In-State Processing Agreement must include the following provisions or attachments:
(1) Contact information for all appropriate parties to the agreement;
(2) The effective dates of the agreement;
(3) A list of recipient agencies eligible to receive end products, as applicable;
(4) In the event that subcontracting
is allowed, the specific activities that
will be performed under subcontracts;
(5) Assurance that the processor will
provide a performance bond or irrevocable letter of credit to protect the
value of donated foods it is expected to
maintain in inventory, in accordance
with § 250.32;
(6) End product data schedules for all
end products, with all required information, in accordance with § 250.33(a);
(7) Assurance that the processor will
meet processing yields for donated
foods, in accordance with § 250.33;
(8) Assurance that the processor will
compensate the distributing or recipient agency, as appropriate, for any loss
of donated foods, in accordance with
§ 250.33(c);
(9) Any applicable labeling requirements;
(10) Assurance that the processor will
meet requirements for the substitution
of commercially purchased foods for
donated foods, including grading requirements, in accordance with § 250.34;
(11) Assurance that the processor will
not
substitute
or
commingle
backhauled donated foods and will provide end products processed from such
donated foods only to the recipient
agency from which the foods were received, as applicable;
(12) Assurance that the processor will
provide for the safe and effective storage of donated foods, meet inspection
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§ 250.39
7 CFR Ch. II (1–1–22 Edition)
requirements, and maintain an effective quality control system at its processing facilities;
(13) Assurance that the processor will
report donated food inventory activity
and maintain inventories within approved levels;
(14) Assurance that the processor will
return, transfer, or pay for, donated
food inventories remaining upon termination of the agreement, in accordance
with § 250.35(f);
(15) The specific method(s) of end
product sales permitted, in accordance
with § 250.36;
(16) Assurance that the processor will
credit recipient agencies for the value
of all donated foods, in accordance with
§ 250.36;
(17) Assurance that the processor will
submit performance reports and meet
other reporting and recordkeeping requirements, in accordance with § 250.37;
(18) Assurance that the processor will
obtain independent CPA audits and
will correct any deficiencies identified
in such audits, in accordance with
§ 250.20;
(19) A statement that the distributing agency, subdistributing agency,
or recipient agency, the Comptroller
General, the Department of Agriculture, or their duly authorized representatives, may perform on-site reviews of the processor’s operation to
ensure that all activities relating to
donated foods are performed in accordance with the requirements in 7 CFR
part 250;
(20) A statement that the agreement
may be terminated by either party
upon 30 days’ written notice;
(21) A statement that the agreement
may be terminated immediately if the
processor has not complied with its
terms and conditions;
(22) A statement that extensions or
renewals of the agreement, if applicable, are contingent upon the fulfillment of all agreement provisions; and
(23) A statement requiring the processor to enter into an agreement with
any and all distributors delivering
processed end products to recipient
agencies that ensures adequate data
sharing, reporting, and crediting of donated foods, in accordance with
§ 250.30(i).
(d) Required provisions for Recipient
Agency Processing Agreement. The Recipient Agency Processing Agreement
must contain the same provisions as an
In-State Processing Agreement, to the
extent that the distributing agency
permits the recipient agency to perform activities normally performed by
the distributing agency under an InState Processing Agreement (e.g., approval of end product data schedules,
review of performance reports, or management of the performance bond).
However, a list of recipient agencies eligible to receive end products need not
be included unless the Recipient Agency Processing Agreement represents
more than one (e.g., a cooperative) recipient agency.
(e) Noncompliance with processing requirements. If the processor has not
complied with processing requirements, the distributing or recipient
agency, as appropriate, may choose to
not extend or renew the agreement and
may immediately terminate it.
§ 250.39
Miscellaneous provisions.
(a) Waiver of processing requirements.
The Food and Nutrition Service may
waive any of the requirements contained in this part for the purpose of
conducting demonstration projects to
test program changes designed to improve the processing of donated foods.
(b) Processing activity guidance. Distributing agencies must develop and
provide a processing manual or similar
procedural material for guidance to
contracting agencies, recipient agencies, and processors. Distributing agencies must revise these materials as necessary to reflect policy and regulatory
changes. This guidance material must
be provided to contracting agencies, recipient agencies, and processors at the
time of the approval of the initial
agreement by the distributing agency,
when there have been regulatory or
policy
changes
which
necessitate
changes in the guidance materials, and
upon request. The manual must include, at a minimum, statements of the
distributing agency’s policies and procedures regarding:
(1) Contract approval;
(2) Monitoring and review of processing activities;
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Food and Nutrition Service, USDA
§ 250.50
(3) Recordkeeping and reporting requirements;
(4) Inventory controls; and
(5) Refund applications.
(c) Guidance or information. Guidance
or information relating to the processing of donated foods is included on
the FNS website or may otherwise be
obtained from FNS.
Subpart D—Donated Foods in
Contracts With Food Service
Management Companies
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SOURCE: 73 FR 46185, Aug. 8, 2008, unless
otherwise noted.
§ 250.50 Contract requirements and
procurement.
(a) Contract requirements. Prior to donated foods being made available to a
food service management company, the
recipient agency must enter into a contract with the food service management company. The contract must ensure that all donated foods received for
use by the recipient agency in the
school or fiscal year, as applicable, are
used in the recipient agency’s food
service, or that commercially purchased foods are used in place of such
donated foods only in accordance with
the requirements in § 250.51(d). Contracts between recipient agencies in
child nutrition programs and food service management companies must also
ensure compliance with other requirements in this subpart relating to donated foods, as well as other Federal
requirements in 7 CFR parts 210, 220,
225, or 226, as applicable. Contracts between other recipient agencies—i.e.,
charitable institutions and recipient
agencies utilizing TEFAP foods—and
food service management companies
are not subject to the other requirements in this subpart.
(b) Types of contracts. Recipient agencies may enter into a fixed-price or a
cost-reimbursable contract with a food
service management company, except
that recipient agencies in CACFP are
prohibited from entering into cost-reimbursable contracts, in accordance
with 7 CFR part 226. Under a fixedprice contract, the recipient agency
pays a fixed cost per meal provided or
a fixed cost for a certain time period.
Under a cost-reimbursable contract,
the food service management company
charges the recipient agency for food
service operating costs, and also
charges fixed fees for management or
services.
(c) Procurement requirements. The recipient agency must meet Departmental procurement requirements in 7
2 CFR part 200, subpart D, and USDA
implementing regulations at 2 CFR
parts 400 and 416, as applicable, in obtaining the services of a food service
management company, as well as applicable requirements in 7 CFR parts
210, 220, 225, or 226. The recipient agency must ensure that procurement documents, as well as contract provisions,
include any donated food activities
that a food service management company is to perform, such as those activities listed in paragraph (d) of this
section. The procurement and contract
must also specify the method used to
determine the donated food values to
be used in crediting, or the actual values assigned, in accordance with
§ 250.51. The method used to determine
the donated food values may not be established through a post-award negotiation, or by any other method that
may directly or indirectly alter the
terms and conditions of the procurement or contract.
(d) Activities relating to donated foods.
A food service management company
may perform specific activities relating to donated foods, such as those listed in this paragraph (d), in accordance
with procurement documents and its
contract with the recipient agency.
Such activities may also include the
procurement of processed end products
on behalf of the recipient agency. Such
procurement must ensure compliance
with the requirements in subpart C of
this part and with the provisions of the
distributing or recipient agency’s processing agreements, and must ensure
crediting of the recipient agency for
the value of donated foods contained in
such end products at the processing
agreement value. Although the food
service management company may
procure processed end products on behalf of the recipient agency, it may not
itself enter into the processing agreement with the processor required in
subpart C of this part. Other donated
food activities that the food service
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§ 250.51
7 CFR Ch. II (1–1–22 Edition)
management company may perform include:
(1) Preparing and serving meals;
(2) Ordering or selection of donated
foods, in coordination with the recipient agency, and in accordance with
§ 250.58(a);
(3) Storage and inventory management of donated foods, in accordance
with § 250.52; and
(4) Payment of processing fees or submittal of refund requests to a processor
on behalf of the recipient agency, or remittance of refunds for the value of donated foods in processed end products
to the recipient agency, in accordance
with the requirements in subpart C of
this part.
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[73 FR 46185, Aug. 8, 2008, as amended at 81
FR 23111, Apr. 19, 2016]
§ 250.51 Crediting for, and use of, donated foods.
(a) Crediting for donated foods. In both
fixed-price and cost-reimbursable contracts, the food service management
company must credit the recipient
agency for the value of all donated
foods received for use in the recipient
agency’s meal service in a school year
or fiscal year (including both entitlement and bonus foods). Such requirement includes crediting for the value
of donated foods contained in processed
end products if the food service management company’s contract requires
it to:
(1) Procure processed end products on
behalf of the recipient agency; or
(2) Act as an intermediary in passing
the donated food value in processed end
products on to the recipient agency.
(b) Method and frequency of crediting.
The recipient agency may permit crediting for the value of donated foods
through invoice reductions, refunds,
discounts, or other means. However, all
forms of crediting must provide clear
documentation of the value received
from the donated foods—e.g., by separate line item entries on invoices. If
provided for in a fixed-price contract,
the recipient agency may permit a food
service management company to precredit for donated foods. In pre-crediting, a deduction for the value of donated foods is included in the established fixed price per meal. However,
the recipient agency must ensure that
the food service management company
provides an additional credit for any
donated foods not accounted for in the
fixed price per meal—e.g., for donated
foods that are not made available until
later in the year. In cost-reimbursable
contracts, crediting may be performed
by disclosure; i.e., the food service
management company credits the recipient agency for the value of donated
foods by disclosing, in its billing for
food costs submitted to the recipient
agency, the savings resulting from the
receipt of donated foods for the billing
period. In all cases, the recipient agency must require crediting to be performed not less frequently than annually, and must ensure that the specified method of valuation of donated
foods permits crediting to be achieved
in the required time period. A school
food authority must also ensure that
the method, and timing, of crediting
does not cause its cash resources to exceed the limits established in 7 CFR
210.9(b)(2).
(c) Donated food values required in
crediting. The recipient agency must
ensure that, in crediting it for the
value of donated foods, the food service
management company uses the donated food values determined by the
distributing agency, in accordance
with § 250.58(e), or, if approved by the
distributing agency, donated food values determined by an alternate means
of the recipient agency’s choosing. For
example, the recipient agency may,
with the approval of the distributing
agency, specify that the value will be
the average price per pound for a food,
or for a group or category of foods (e.g.,
all frozen foods or cereal products), as
listed in market journals over a specified period of time. However, the method of determining the donated food values to be used in crediting must be included in procurement documents and
in the contract, and must result in the
determination of actual values; e.g.,
the average USDA purchase price for
the period of the contract with the food
vendor, or the average price per pound
listed in market journals over a specified period of time. Negotiation of such
values is not permitted. Additionally,
the method of valuation must ensure
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Food and Nutrition Service, USDA
§ 250.53
that crediting may be achieved in accordance with paragraph (b) of this section, and at the specific frequency established in procurement documents
and in the contract.
(d) Use of donated foods. The food
service management company must use
all donated beef, pork, and all processed end products, in the recipient
agency’s food service, and must use all
other donated foods, or commercially
purchased foods of the same generic
identity, of U.S. origin, and of equal or
better quality than the donated foods,
in the recipient agency’s food service
(unless the contract specifically stipulates that the donated foods, and not
such commercial substitutes, be used).
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[73 FR 46185, Aug. 8, 2008, as amended at 81
FR 23111, Apr. 19, 2016]
§ 250.52 Storage and inventory management of donated foods.
(a) General requirements. The food
service management company must
meet the requirements for the safe
storage and control of donated foods in
§ 250.14(a).
(b) Storage and inventory with commercially purchased foods. The food service
management company may store and
inventory donated foods together with
foods it has purchased commercially
for the school food authority’s use (unless specifically prohibited in the contract). It may store and inventory such
foods together with other commercially purchased foods only to the extent that such a system ensures compliance with the requirements for the
use of donated foods in § 250.51(d)—i.e.,
use all donated beef and pork, and all
end products in the food service, and
use all other donated foods or commercially purchased foods of the same generic identity, of U.S. origin, and of
equal or better quality than the donated foods, in the food service. Additionally, under cost-reimbursable contracts, the food service management
company must ensure that its system
of inventory management does not result in the recipient agency being
charged for donated foods.
(c) Disposition of donated foods and
credit reconciliation upon termination of
the contract. When a contract terminates, and is not extended or renewed,
the food service management company
must return all unused donated beef,
pork, and processed end products, and
must, at the recipient agency’s discretion, return other unused donated
foods. The recipient agency must ensure that the food service management
company has credited it for the value
of all donated foods received for use in
the recipient agency’s meal service in a
school year or fiscal year, as applicable.
[81 FR 23111, Apr. 19, 2016]
§ 250.53
Contract provisions.
(a) Required contract provisions in
fixed-price contracts. The following provisions relating to the use of donated
foods must be included, as applicable,
in a recipient agency’s fixed-price contract with a food service management
company. Such provisions must also be
included in procurement documents.
The required provisions are:
(1) A statement that the food service
management company must credit the
recipient agency for the value of all donated foods received for use in the recipient agency’s meal service in the
school year or fiscal year (including
both entitlement and bonus foods), and
including the value of donated foods
contained in processed end products, in
accordance with the contingencies in
§ 250.51(a);
(2) The method and frequency by
which crediting will occur, and the
means of documentation to be utilized
to verify that the value of all donated
foods has been credited;
(3) The method of determining the
donated food values to be used in crediting, in accordance with § 250.51(c), or
the actual donated food values;
(4) Any activities relating to donated
foods that the food service management company will be responsible for,
in accordance with § 250.50(d), and assurance that such activities will be
performed in accordance with the applicable requirements in 7 CFR part
250;
(5) A statement that the food service
management company will use all donated beef and pork products, and all
processed end products, in the recipient
agency’s food service;
(6) A statement that the food service
management company will use all
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§ 250.54
7 CFR Ch. II (1–1–22 Edition)
other donated foods, or will use commercially purchased foods of the same
generic identity, of U.S. origin, and of
equal of better quality than the donated foods, in the recipient agency’s
food service;
(7) Assurance that the procurement
of processed end products on behalf of
the recipient agency, as applicable,
will ensure compliance with the requirements in subpart C of 7 CFR part
250 and with the provisions of distributing or recipient agency processing
agreements, and will ensure crediting
of the recipient agency for the value of
donated foods contained in such end
products at the processing agreement
value;
(8) Assurance that the food service
management company will not itself
enter into the processing agreement
with the processor required in subpart
C of 7 CFR part 250;
(9) Assurance that the food service
management company will comply
with the storage and inventory requirements for donated foods;
(10) A statement that the distributing agency, subdistributing agency,
or recipient agency, the Comptroller
General, the Department of Agriculture, or their duly authorized representatives, may perform onsite reviews of the food service management
company’s food service operation, including the review of records, to ensure
compliance with requirements for the
management and use of donated foods;
(11) A statement that the food service
management company will maintain
records to document its compliance
with requirements relating to donated
foods, in accordance with § 250.54(b);
and
(12) A statement that extensions or
renewals of the contract, if applicable,
are contingent upon the fulfillment of
all contract provisions relating to donated foods.
(b) Required contract provisions in costreimbursable contracts. A cost-reimbursable contract must include the same
provisions as those required for a fixedprice contract in paragraph (a) of this
section. Such provisions must also be
included in procurement documents.
However, a cost-reimbursable contract
must also contain a statement that the
food service management company will
ensure that its system of inventory
management will not result in the recipient agency being charged for donated foods.
[73 FR 46185, Aug. 8, 2008, as amended at 81
FR 23111, Apr. 19, 2016]
§ 250.54 Recordkeeping and reviews.
(a) Recordkeeping requirements for the
recipient agency. The recipient agency
must maintain the following records
relating to the use of donated foods in
its contract with the food service management company:
(1) The donated foods and processed
end products received and provided to
the food service management company
for use in the recipient agency’s food
service;
(2) Documentation that the food service management company has credited
it for the value of all donated foods received for use in the recipient agency’s
food service in the school or fiscal
year, including, in accordance with the
requirements in § 250.51(a), the value of
donated foods contained in processed
end products; and
(3) The actual donated food values
used in crediting.
(b) Recordkeeping requirements for the
food service management company. The
food service management company
must maintain the following records
relating to the use of donated foods in
its contract with the recipient agency:
(1) The donated foods and processed
end products received from, or on behalf of, the recipient agency, for use in
the recipient agency’s food service;
(2) Documentation that it has credited the recipient agency for the value
of all donated foods received for use in
the recipient agency’s food service in
the school or fiscal year, including, in
accordance with the requirements in
§ 250.51(a), the value of donated foods
contained in processed end products;
and
(3) Documentation of its procurement
of processed end products on behalf of
the recipient agency, as applicable.
(c) Review requirements for the recipient agency. The recipient agency must
ensure that the food service management company is in compliance with
the requirements of this part through
its monitoring of the food service operation, as required in 7 CFR parts 210,
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Food and Nutrition Service, USDA
§ 250.57
225, or 226, as applicable. The recipient
agency must also conduct a reconciliation at least annually (and upon termination of the contract) to ensure
that the food service management
company has credited it for the value
of all donated foods received for use in
the recipient agency’s food service in
the school or fiscal year, including, in
accordance with the requirements in
§ 250.51(a), the value of donated foods
contained in processed end products.
(d) Departmental reviews of food service
management companies. The Department
may conduct reviews of food service
management company operations, as
necessary, to ensure compliance with
the requirements of this part with respect to the use and management of donated foods.
Subpart E—National School Lunch
Program (NSLP) and Other
Child Nutrition Programs
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SOURCE: 73 FR 46185, Aug. 8, 2008, unless
otherwise noted.
§ 250.56 Provision of donated foods in
NSLP.
(a) Distribution of donated foods in
NSLP. The Department provides donated foods in NSLP to distributing
agencies. Distributing agencies provide
donated foods to school food authorities that participate in NSLP for use in
serving nutritious lunches or other
meals to schoolchildren in their nonprofit school food service. The distributing agency must confirm the participation of school food authorities in
NSLP with the State administering
agency (if different from the distributing agency). In addition to requirements in this part relating to donated
foods, distributing agencies and school
food authorities in NSLP must adhere
to Federal regulations in 7 CFR part
210, as applicable.
(b) Types of donated foods distributed.
The Department purchases a wide variety of foods for distribution in NSLP
each school year. A list of available
foods is posted on the FNS Web site,
for access by distributing agencies and
school food authorities. In addition to
Section 6 foods (42 U.S.C. 1755) as described in paragraph (c) of this section,
the distributing agency may also re-
ceive Section 14 donated foods (42
U.S.C. 1762(a)), and donated foods under
Section 32 (7 U.S.C. 612c), Section 416 (7
U.S.C. 1431), or Section 709 (7 U.S.C.
1446a–1), as available.
(c) National per-meal value of donated
foods. For each school year, the distributing agency receives, at a minimum,
the national per-meal value of donated
foods, as established by Section 6(c) of
the Richard B. Russell National School
Lunch Act (42 U.S.C. 1755(c)), multiplied by the number of reimbursable
lunches served in the State in the previous school year. The donated foods
provided in this manner are referred to
as Section 6 foods, or entitlement
foods. The national per-meal value is
adjusted each year to reflect changes
in the Bureau of Labor Statistic’s Producer Price Index for Foods Used in
Schools and Institutions, in accordance
with the Richard B. Russell National
School Lunch Act. The adjusted value
is published in a notice in the FEDERAL
REGISTER in July of each year. Reimbursable lunches are those that meet
the nutritional standards established
in 7 CFR part 210, and that are reported
to FNS, in accordance with the requirements in that part.
(d) Donated food values used to credit
distributing agency entitlement levels.
FNS uses the average price (cost per
pound) for USDA purchases of donated
food made in a contract period to credit distributing agency entitlement levels.
(e) Cash in lieu of donated foods.
States that phased out their food distribution facilities prior to July 1, 1974,
are permitted to choose to receive cash
in lieu of the donated foods to which
they would be entitled in NSLP, in accordance with the Richard B. Russell
National School Lunch Act (42 U.S.C.
1765) and with 7 CFR part 240.
§ 250.57 Commodity schools.
(a)
Categorization
of
commodity
schools. Commodity schools are schools
that operate a nonprofit school food
service in accordance with 7 CFR part
210, but receive additional donated food
assistance rather than the general cash
payment available to them under Section 4 of the Richard B. Russell National School Lunch Act (42 U.S.C.
1753). In addition to requirements in
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§ 250.58
7 CFR Ch. II (1–1–22 Edition)
this part relating to donated foods,
commodity schools must adhere to
Federal regulations in 7 CFR part 210,
as applicable.
(b) Value of donated foods for commodity schools. For participating commodity schools, the distributing agency receives donated foods valued at the
sum of the national per-meal value and
the value of the general cash payment
available to it under Section 4 of the
Richard B. Russell National School
Lunch Act (42 U.S.C. 1753), multiplied
by the number of reimbursable lunches
served by commodity schools in the
previous school year. From the total
value of donated food assistance for
which it is eligible, a commodity
school may elect to receive up to 5
cents per meal in cash to cover processing and handling expenses related to
the use of donated foods. In addition to
Section 6 and Section 14 foods under
the Richard B. Russell National School
Lunch Act (42 U.S.C. 1755 and 1762(a)),
the distributing agency may also receive donated foods under Section 32 (7
U.S.C. 612c), Section 416 (7 U.S.C. 1431),
or Section 709 (7 U.S.C. 1446a–1), as
available, for commodity schools.
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§ 250.58 Ordering donated foods and
their provision to school food authorities.
(a) Ordering and distribution of donated foods. The distributing agency
must ensure that school food authorities are able to submit donated food orders through the FNS electronic donated foods ordering system, or
through a comparable electronic food
ordering system. The distributing
agency must ensure that all school
food authorities have the opportunity
to provide input at least annually in
determining the donated foods from
the full list that are made available to
them for ordering in the FNS electronic donated foods ordering system
or other comparable electronic ordering system. The distributing agency
must ensure distribution to school food
authorities of all such ordered donated
foods that may be distributed to them
in a cost-effective manner (including
the use of split shipments, as necessary), and that they may utilize efficiently and without waste.
(b) Value of donated foods offered to
school food authorities. In accordance
with Section 6(c) of the Richard B.
Russell National School Lunch Act (42
U.S.C. 1755(c)), the distributing agency
must offer the school food authority,
at a minimum, the national per-meal
value of donated food assistance multiplied by the number of reimbursable
lunches served by the school food authority in the previous school year.
This is referred to as the commodity
offer value. For a commodity school,
the distributing agency must offer the
sum of the national per-meal value of
donated foods and the value of the general cash payment available to it under
Section 4 of the Richard B. Russell National School Lunch Act (42 U.S.C.
1753), multiplied by the number of reimbursable lunches served by the
school in the previous school year. The
school food authority may also receive
bonus foods, as available, in addition to
the Section 6 foods.
(c) Receipt of less donated foods than
the commodity offer value. In certain
cases, the school food authority may
receive less donated foods than the
commodity offer value in a school
year. This ‘‘adjusted’’ value of donated
foods is referred to as the adjusted assistance level. For example, the school
food authority may receive an adjusted
assistance level if:
(1) The distributing agency, in consultation with the school food authority, determines that the school food
authority cannot efficiently utilize the
commodity offer value of donated
foods; or
(2) The school food authority does
not order, or select, donated foods
equal to the commodity offer value
that can be cost-effectively distributed
to it.
(d) Receipt of more donated foods than
the commodity offer value. The school
food authority may receive more donated foods than the commodity offer
value if the distributing agency, in
consultation with the school food authority, determines that the school
food authority may efficiently utilize
more donated foods than the commodity offer value, and more donated
foods are available for distribution.
This may occur, for example, if other
school food authorities receive less
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Food and Nutrition Service, USDA
§ 250.59
than the commodity offer value of donated foods for one of the reasons described in paragraph (c) of this section.
(e) Donated food value in crediting. In
meeting the commodity offer value of
donated foods for the school food authority, the distributing agency must
use the cost-per-pound donated food
prices posted annually by USDA, the
most recently published cost-per-pound
price in the USDA donated foods catalog, and/or a rolling average of the
USDA prices (average cost per pound).
The distributing agency must credit
the school food authority using the
USDA purchase price (cost-per-pound),
and update the price at least semi-annually to reflect the most recent USDA
purchase price.
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[73 FR 46185, Aug. 8, 2008, as amended at 81
FR 23111, Apr. 19, 2016]
§ 250.59 Storage, control, and use of
donated foods.
(a) Storage and inventory management.
The distributing agency must ensure
compliance with requirements in
§§ 250.12 and 250.13 in order to ensure
the safe and effective storage and inventory management of donated foods,
and their efficient and cost-effective
distribution to school food authorities.
The school food authority must ensure
compliance with requirements in
§ 210.13 of this chapter and §§ 250.13 and
250.14 to ensure the safe and sanitary
storage, inventory management, and
use of donated foods and purchased
foods. In accordance with § 250.14(c), the
school food authority may commingle
donated foods and purchased foods in
storage and maintain a single inventory record of such commingled foods,
in a single inventory management system.
(b) Use of donated foods in the nonprofit school food service. The school
food authority must use donated foods,
as much as is practical, in the lunches
served to schoolchildren, for which
they receive an established per-meal
value of donated food assistance each
school year. However, the school food
authority may also use donated foods
in other activities of the nonprofit
school food service. Revenues received
from such activities must accrue to the
school food authority’s nonprofit
school food service account, in accord-
ance with § 210.14 of this chapter. Some
examples of such activities in which
donated foods may be used include:
(1) School breakfasts or other meals
served in child nutrition programs;
(2) A la carte foods sold to schoolchildren;
(3) Meals served to adults directly involved in the operation and administration of the nonprofit school food
service, and to other school staff; and
(4) Training in nutrition, health, food
service, or general home economics instruction for students.
(c) Use of donated foods outside of the
nonprofit school food service. The school
food authority should not use donated
foods in meals or other activities that
do not benefit primarily schoolchildren, such as banquets or catered
events. However, as their use in such
activities may not always be avoided
(e.g., if donated foods are commingled
with purchased foods in a single inventory management system), the school
food authority must ensure reimbursement to the nonprofit school food service for the value of donated foods used
in such activities. When such reimbursement may not be based on actual
usage of donated foods (e.g., in a single
inventory management system), the
school food authority must establish
an alternate method of reimbursement—e.g., by including the current
per-meal value of donated food assistance in the price charged for the meal
or other activity.
(d) Use of donated foods in a contract
with a food service management company.
When the school food authority contracts with a food service management
company to conduct the food service,
in accordance with § 210.16 of this chapter, it must ensure compliance with requirements in subpart D of this part,
which address the treatment of donated foods under such contract. The
school food authority must also ensure
compliance with the use of donated
foods in paragraphs (b) and (c) of this
section under its contract with a food
service management company.
(e) School food authorities acting as a
collective unit. Two or more school food
authorities may conduct activities of
the nonprofit school food service as a
collective unit (e.g., in a school co-op
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§ 250.60
7 CFR Ch. II (1–1–22 Edition)
or consortium), including activities relating to donated foods. Such activities
must be conducted in accordance with
a written agreement or contract between the parties. The school food authority collective unit is subject to the
same requirements as a single school
food authority in conducting such activities. For example, the school food
authority collective unit may use a
single inventory management system
in its storage and control of purchased
and donated foods.
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[81 FR 23111, Apr. 19, 2016]
§ 250.60 Child and Adult Care Food
Program (CACFP).
(a) Distribution of donated foods in
CACFP. The Department provides donated foods in CACFP to distributing
agencies, which provide them to child
care and adult care institutions participating in CACFP for use in serving
nutritious lunches and suppers to eligible recipients. Distributing agencies
and child care and adult care institutions must also adhere to Federal regulations in 7 CFR part 226, as applicable.
(b) Types and quantities of donated
foods distributed. For each school year,
the distributing agency receives, at a
minimum, the national per-meal value
of donated food assistance (or cash in
lieu of donated foods) multiplied by the
number of reimbursable lunches and
suppers served in the State in the previous school year, as established in
Section 6(c) of the Richard B. Russell
National School Lunch Act (42 U.S.C.
1755(c)). The national per-meal value is
adjusted each year to reflect changes
in the Bureau of Labor Statistic’s Producer Price Index for Foods Used in
Schools and Institutions. The adjusted
per-meal value is published in a notice
in the FEDERAL REGISTER in July of
each year. Reimbursable lunches and
suppers are those meeting the nutritional standards established in 7 CFR
part 226. The number of reimbursable
lunches and suppers may be adjusted
during, or at the end of the school
year, in accordance with 7 CFR part
226. In addition to Section 6 entitlement foods (42 U.S.C. 1755(c)), the distributing agency may also receive Section 14 donated foods (42 U.S.C. 1762(a)),
and donated foods under Section 32 (7
U.S.C. 612c), Section 416 (7 U.S.C. 1431),
or Section 709 (7 U.S.C. 1446a–1), as
available, for distribution to child care
and adult care institutions participating in CACFP.
(c) Cash in lieu of donated foods. In accordance with the Richard B. Russell
National School Lunch Act, and with 7
CFR part 226, the State administering
agency must determine whether child
care and adult care institutions participating in CACFP wish to receive
donated foods or cash in lieu of donated
foods, and ensure that they receive the
preferred form of assistance. The State
administering agency must inform the
distributing agency (if a different agency) which institutions wish to receive
donated foods and must ensure that
such foods are provided to them. However, if the State administering agency, in consultation with the distributing agency, determines that distribution of such foods would not be cost-effective, it may, with the concurrence of
FNS, provide cash payments to the applicable institutions instead.
(d) Use of donated foods in a contract
with a food service management company.
A child care or adult care institution
may use donated foods in a contract
with a food service management company to conduct its food service. The
contract must meet the requirements
in subpart D of this part with respect
to donated foods, and must also meet
requirements in 7 CFR part 226, 2 CFR
part 200, subpart D and appendix II,
Contract Provisions for Non-Federal
Entity
Contracts
Under
Federal
Awards, and USDA implementing regulations at 2 CFR parts 400 and 416, as
applicable, with respect to the formation of such contracts.
(e) Applicability of other requirements
in this subpart to CACFP. The requirements in this subpart relating to the
ordering, storage and inventory management, and use of donated foods in
NSLP, also apply to CACFP. However,
in accordance with 7 CFR part 226, a
child care or adult care institution
that uses donated foods to prepare and
provide meals to other such institutions is considered a food service management company.
[73 FR 46185, Aug. 8, 2008. Redesignated and
amended at 81 FR 23112, Apr. 19, 2016]
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Food and Nutrition Service, USDA
§ 250.64
§ 250.61 Summer Food Service Program (SFSP).
(a) Distribution of donated foods in
SFSP. The Department provides donated foods in SFSP to distributing
agencies, which provide them to eligible service institutions participating in
SFSP for use in serving nutritious
meals to needy children primarily in
the summer months, in their nonprofit
food service programs. Distributing
agencies and service institutions in
SFSP must also adhere to Federal regulations in 7 CFR part 225, as applicable.
(b) Types and quantities of donated
foods distributed. The distributing agency receives donated foods available
under Section 6 and Section 14 of the
Richard B. Russell National School
Lunch Act (42 U.S.C. 1755 and 1762), and
may also receive donated foods under
Section 32 (7 U.S.C. 612c), Section 416 (7
U.S.C. 1431), or Section 709 (7 U.S.C.
1446a–1), as available, for distribution
to eligible service institutions participating in SFSP. Section 6 donated
foods are provided to distributing agencies in accordance with the number of
meals served in the State in the previous school year that are eligible for
donated food support, in accordance
with 7 CFR part 225.
(c) Distribution of donated foods to
service institutions in SFSP. The distributing agency provides donated food assistance to eligible service institutions
participating in SFSP based on the
number of meals served that are eligible for donated food support, in accordance with 7 CFR part 225.
(d) Use of donated foods in a contract
with a food service management company.
A service institution may use donated
foods in a contract with a food service
management company to conduct the
food service. The contract must meet
the requirements in subpart D of this
part with respect to donated foods, and
must also meet requirements in 7 CFR
part 225, 2 CFR part 200, subpart D and
appendix II, Contract Provisions for
Non-Federal Entity Contracts Under
Federal Awards, and USDA implementing regulations at 2 CFR parts 400
and 416, as applicable, with respect to
the formation of such contracts.
(e) Applicability of other requirements
in this subpart to SFSP. The require-
ments in this subpart relating to the
ordering, storage and inventory management, and use of donated foods in
NSLP, also apply to SFSP.
[73 FR 46185, Aug. 8, 2008. Redesignated and
amended at 81 FR 23112, Apr. 19, 2016]
Subpart F—Household Programs
SOURCE: 81 FR 23112, Apr. 19, 2016, unless
otherwise noted.
§ 250.63 Commodity
Supplemental
Food Program (CSFP).
(a) Distribution of donated foods in
CSFP. The Department provides donated foods in CSFP to the distributing
agency (i.e., the State agency, in accordance with 7 CFR part 247) for further distribution in the State, in accordance with 7 CFR part 247. State
agencies and recipient agencies (i.e.,
local agencies in 7 CFR part 247) must
comply with the requirements of this
part in the distribution, control, and
use of donated foods in CSFP, to the
extent that such requirements are not
inconsistent with the requirements in 7
CFR part 247.
(b) Types of donated foods distributed.
Donated foods distributed in CSFP include Section 4(a) foods, and donated
foods provided under Section 32, Section 416, or Section 709, as available.
§ 250.64 The Emergency Food Assistance Program (TEFAP).
(a) Distribution of donated foods in
TEFAP. The Department provides donated foods in TEFAP to the distributing agency (i.e., the State agency, in
accordance with 7 CFR part 251) for
further distribution in the State, in accordance with 7 CFR part 251. State
agencies and recipient agencies must
comply with the requirements of this
part in the distribution, control, and
use of donated foods, to the extent that
such requirements are not inconsistent
with the requirements in 7 CFR part
251.
(b) Types of donated foods distributed.
Donated foods distributed in TEFAP
include Section 27 foods, and donated
foods provided under Section 32, Section 416, or Section 709, as available.
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§ 250.65
7 CFR Ch. II (1–1–22 Edition)
§ 250.65 Food Distribution Program on
Indian Reservations (FDPIR).
(a) Distribution of donated foods in
FDPIR. The Department provides donated foods in FDPIR to the distributing agency (i.e., the State agency, in
accordance with 7 CFR parts 253 and
254, which may be an Indian Tribal Organization) for further distribution, in
accordance with 7 CFR parts 253 and
254. The State agency must comply
with the requirements of this part in
the distribution, control, and use of donated foods, to the extent that such requirements are not inconsistent with
the requirements in 7 CFR parts 253
and 254.
(b) Types of donated foods distributed.
Donated foods distributed in FDPIR include Section 4(a) foods, and donated
foods provided under Section 32, Section 416, or Section 709, as available.
§ 250.66
[Reserved]
Subpart G—Additional Provisions
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§ 250.67
Charitable institutions.
(a) Distribution to charitable institutions. The Department provides donated foods to distributing agencies for
distribution to charitable institutions,
as defined in this part. A charitable institution must have a signed agreement with the distributing agency in
order to receive donated foods, in accordance with § 250.12(b). However, the
following organizations may not receive donated foods as charitable institutions:
(1) Schools, summer camps, service
institutions, and child and adult care
institutions that participate in child
nutrition programs or as commodity
schools; and
(2) Adult correctional institutions
that do not conduct rehabilitation programs for a majority of inmates.
(b) Types of charitable institutions.
Some types of charitable institutions
that may receive donated foods, if they
meet the requirements of this section,
include:
(1) Hospitals or retirement homes;
(2) Emergency shelters, soup kitchens, or emergency kitchens;
(3) Elderly nutrition projects or adult
day care centers;
(4) Schools, summer camps, service
institutions, and child care institutions that do not participate in child
nutrition programs; and
(5) Adult correctional institutions
that conduct rehabilitation programs
for a majority of inmates.
(c) Determining service to predominantly needy persons. To determine if a
charitable institution serves predominantly needy persons, the distributing
agency must use:
(1) Socioeconomic data of the area in
which the organization is located, or of
the clientele served by the organization;
(2) Data from other public or private
social service agencies, or from State
advisory boards, such as those established in accordance with 7 CFR
251.4(h)(4); or
(3) Other similar data.
(d) Types and quantities of donated
foods distributed. A charitable institution may receive donated foods under
Section 4(a), Section 32, Section 416, or
Section 709, as available. The distributing agency must distribute donated
foods to charitable institutions based
on the quantities that each may effectively utilize without waste, and the
total quantities available for distribution to such institutions.
(e) Contracts with food service management companies. A charitable institution may use donated foods in a contract with a food service management
company. The contract must ensure
that all donated foods received for use
by the charitable institution in a fiscal
year are used in the charitable institution’s food service. However, the charitable institution is not subject to the
other requirements in subpart D of this
part relating to the use of donated
foods under such contracts.
[73 FR 46184, Aug. 8, 2008]
§ 250.68 Nutrition Services Incentive
Program (NSIP).
(a) Distribution of donated foods in
NSIP. The Department provides donated foods in NSIP to State Units on
Aging and their selected elderly nutrition projects for use in providing meals
to elderly persons. NSIP is administered at the Federal level by DHHS’
Administration for Community Living
(ACL), which provides an NSIP grant
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Food and Nutrition Service, USDA
§ 250.69
each year to State Units on Aging. The
State agencies may choose to receive
all, or part, of the grant as donated
foods, on behalf of its elderly nutrition
projects. The Department is responsible for the purchase of the donated
foods and their delivery to State Units
on Aging. ACL is responsible for transferring funds to the Department for the
cost of donated food purchases and for
expenses related to such purchases.
(b) Types and quantities of donated
foods distributed. Each State Unit on
Aging, and its elderly nutrition
projects, may receive any types of donated foods available in food distribution or child nutrition programs, to the
extent that such foods may be distributed cost-effectively. Each State Unit
on Aging may receive donated foods
with a value equal to its NSIP grant.
Each State Unit on Aging and elderly
nutrition project may also receive donated foods under Section 32, Section
416, and Section 709, as available, and
under Section 14 (42 U.S.C. 1762(a)).
(c) Role of distributing agency. The Department delivers NSIP donated foods
to distributing agencies, which distribute them to elderly nutrition
projects selected by each State Unit on
Aging. The distributing agency may
only distribute donated foods to elderly
nutrition projects with which they
have signed agreements. The agreements must contain provisions that describe the roles of each party in ensuring that the desired donated foods are
ordered, stored, and distributed in an
effective manner.
(d) Donated food values used in crediting a State Unit on Aging’s NSIP grant.
FNS uses the average price (cost per
pound) for USDA purchases of a donated food made in a contract period in
crediting a State Unit on Aging’s NSIP
grant.
(e) Coordination between FNS and
ACL. FNS and ACL coordinate their respective roles in NSIP through the execution of annual agreements. The
agreement ensures that ACL transfers
funds to FNS sufficient to purchase the
donated foods requested by State Units
on Aging, and to meet expenses related
to such purchases. The agreement also
authorizes FNS to carry over any such
funds that are not used in the current
fiscal year to make purchases of do-
nated foods for the appropriate State
Units on Aging in the following fiscal
year.
[81 FR 23113, Apr. 19, 2016]
§ 250.69 Disasters.
(a) Use of donated foods to provide congregate meals. The distributing agency
may provide donated foods from current inventories, either at the distributing or recipient agency level, to a
disaster organization (as defined in
§ 250.2), for use in providing congregate
meals to persons in need of food assistance as a result of a Presidentially declared disaster or emergency (hereinafter referred to collectively as a ‘‘disaster’’). FNS approval is not required
for such use. However, the distributing
agency must notify FNS that such assistance is to be provided, and the period of time that it is expected to be
needed. The distributing agency may
extend such period of assistance as
needs dictate, but must notify FNS of
such extension.
(b) Use of donated foods for distribution
to households. Subject to FNS approval,
the distributing agency may provide
donated foods from current inventories, either at the distributing or recipient agency level, to a disaster organization, for distribution to households
in need of food assistance because of a
disaster. Such distribution may continue for the period that FNS has determined to be necessary to meet the
needs of such households. However,
households receiving disaster SNAP (DSNAP) benefits are not eligible to receive such donated food assistance.
(c) Approval of disaster organization.
Before distribution of donated foods to
a disaster organization, the distributing agency must review and approve
such organization’s application in accordance with applicable FNS guidance, which must be submitted to the
distributing agency either electronically or in written form. The distributing agency must also submit such
application to FNS for review and approval before permitting distribution
of donated foods to households.
(1) The disaster organization’s application must, to the extent possible, include the following information:
(i) A description of the disaster situation;
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§ 250.70
7 CFR Ch. II (1–1–22 Edition)
(ii) The number of people requiring
assistance;
(iii) The period of time for which donated foods are requested;
(iv) The quantity and types of food
needed; and
(v) The number and location of sites
where donated foods are to be used, to
the extent that such information is
known.
(2) In addition to the information required in paragraph (c)(1) of this section, disaster organizations applying to
distribute donated foods to households
must include the following information
in their application:
(i) An explanation as to why such distribution is needed;
(ii) The method(s) of distribution
available; and
(iii) A statement assuring that DSNAP benefits and donated food assistance will not be provided simultaneously to individual households, and a
description of the system that will be
implemented to prevent such dual participation.
(d) Information from households. If the
issuance of D-SNAP benefits has been
approved, the distributing agency must
ensure that the disaster organization
obtains the following information from
households receiving donated foods,
and reports such information to the
distributing agency:
(1) The name and address of the
household members applying for assistance;
(2) The number of household members; and
(3) A statement from the head of the
household certifying that the household is in need of food assistance, is not
receiving D-SNAP benefits, and understands that the sale or exchange of donated foods is prohibited.
(e) Eligibility of emergency relief workers for congregate meals. The disaster organization may use donated foods to
provide meals to any emergency relief
workers at the congregate feeding site
who are directly engaged in providing
relief assistance.
(f) Reporting and recordkeeping requirements. The distributing agency must
report to FNS the number and location
of sites where donated foods are used in
congregate meals or household distribution as these sites are established.
The distributing agency must also report the types and amounts of donated
foods from distributing or recipient
agency storage facilities used in disaster assistance, utilizing form FNS–
292A, Report of Commodity Distribution
for Disaster Relief, which must be submitted electronically, within 45 days
from the termination of disaster assistance. This form must also be used to
request replacement of donated foods,
in accordance with paragraph (g) of
this section. The distributing agency
must maintain records of reports and
other information relating to disasters.
(g) Replacement of donated foods. In
order to ensure replacement of donated
foods used in disasters, the distributing
agency must submit to FNS a request
for such replacement, utilizing form
FNS–292A, Report of Commodity Distribution for Disaster Relief, within 45 days
following the termination of disaster
assistance. The distributing agency
may request replacement of foods used
from inventories in which donated
foods are commingled with other foods
(i.e., at storage facilities of recipient
agencies utilizing single inventory
management), if the recipient agency
received donated foods of the same
type as the foods used during the year
preceding the onset of the disaster assistance. FNS will replace such foods in
the amounts used, or in the amount of
like donated foods received during the
preceding year, whichever is less.
(h) Reimbursement of transportation
costs. In order to receive reimbursement for any costs incurred in transporting donated foods within the State,
or from one State to another, for use in
disasters, the distributing agency must
submit a public voucher to FNS with
documentation of such costs. FNS will
review the request and reimburse the
distributing agency.
[81 FR 23113, Apr. 19, 2016]
§ 250.70
Situations of distress.
(a) Use of donated foods to provide congregate meals. The distributing agency
may provide donated foods from current inventories, either at the distributing or recipient agency level, to a
disaster organization, for use in providing congregate meals to persons in
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Food and Nutrition Service, USDA
§ 250.70
need of food assistance because of a situation of distress, as this term is defined in § 250.2. If the situation of distress results from a natural event (e.g.,
a hurricane, flood, or snowstorm), such
donated food assistance may be provided for a period not to exceed 30 days,
without the need for FNS approval.
However, the distributing agency must
notify FNS that such assistance is to
be provided. FNS approval must be obtained to permit such donated food assistance for a period exceeding 30 days.
If the situation of distress results from
other than a natural event (e.g., an explosion), FNS approval is required to
permit donated food assistance for use
in providing congregate meals for any
period of time.
(b) Use of donated foods for distribution
to households. The distributing agency
must receive FNS approval to provide
donated foods from current inventories, either at the distributing or recipient agency level, to a disaster organization for distribution to households
in need of food assistance because of a
situation of distress. Such distribution
may continue for the period of time
that FNS determines necessary to
meet the needs of such households.
However, households receiving D-SNAP
benefits are not eligible to receive such
donated food assistance.
(c) Approval of disaster organizations.
Before distribution of donated foods to
a disaster organization, the distributing agency must review and approve
such organization’s application in accordance with applicable FNS guidance, which must be submitted to the
distributing agency either electronically or in written form. The distributing agency must also submit such
application to FNS for review and approval before permitting distribution
of donated foods in a situation of distress that is not the result of a natural
event, or for any distribution of donated foods to households. The disaster
organization’s application must, to the
extent possible, include the information required in § 250.69(c).
(d) Information from households. If the
issuance of D-SNAP benefits has been
approved, the distributing agency must
ensure that the disaster organization
obtains the information in § 250.69(d)
from households receiving donated
foods, and reports such information to
the distributing agency.
(e) Eligibility of emergency relief workers for congregate meals. The disaster organization may use donated foods to
provide meals to any emergency relief
workers at the congregate feeding site
that are directly engaged in providing
relief assistance.
(f) Reporting and recordkeeping requirements. The distributing agency must
report to FNS the number and location
of sites where donated foods are used in
congregate meals or household distribution as these sites are established.
The distributing agency must also report the types and amounts of donated
foods from distributing or recipient
agency storage facilities used in the
situation of distress, utilizing form
FNS–292A, Report of Commodity Distribution for Disaster Relief, which must be
submitted electronically, within 45
days from the termination of assistance. This form must also be used to
request replacement of donated foods,
in accordance with paragraph (g) of
this section. The distributing agency
must maintain records of reports and
other information relating to situations of distress.
(g) Replacement of donated foods. FNS
will replace donated foods used in a situation of distress only to the extent
that funds to provide for such replacement are available. The distributing
agency must submit to FNS a request
for replacement of such foods, utilizing
form FNS–292A, Report of Commodity
Distribution for Disaster Relief, which
must be submitted electronically,
within 45 days from the termination of
assistance. The distributing agency
may request replacement of foods used
from inventories in which donated
foods are commingled with other foods
(i.e., at storage facilities of recipient
agencies utilizing single inventory
management), if the recipient agency
received donated foods of the same
type as the foods used during the year
preceding the onset of the situation of
distress. Subject to the availability of
funds, FNS will replace such foods in
the amounts used, or in the amount of
like donated foods received during the
preceding year, whichever is less.
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§ 250.71
7 CFR Ch. II (1–1–22 Edition)
(h) Reimbursement of transportation
costs. In order to receive reimbursement for any costs incurred in transporting donated foods within the State,
or from one State to another, for use in
a situation of distress, the distributing
agency must submit a public voucher
to FNS with documentation of such
costs. FNS will review the request and
reimburse the distributing agency to
the extent that funds are available.
[81 FR 23113, Apr. 19, 2016]
§ 250.71
OMB control numbers.
Unless as otherwise specified in the
table in this section, the information
collection reporting and recordkeeping
requirements in 7 CFR part 250 are accounted for in OMB control number
0584–0293.
CFR Cite
OMB Control No.
§ 250.4(a) .......................................
§ 250.19(a) .....................................
§§ 250.69(f) and (g) and 250.70(f)
and (g) ........................................
0584–0067
0584–0067, 0584–0293
0584–0067, 0584–0293
[81 FR 23114, Apr. 19, 2016]
PART 251—THE EMERGENCY FOOD
ASSISTANCE PROGRAM
Sec.
251.1 General purpose and scope.
251.2 Administration.
251.3 Definitions.
251.4 Availability of commodities.
251.5 Eligibility determinations.
251.6 Distribution plan.
251.7 Formula adjustments.
251.8 Payment of funds for administrative
costs.
251.9 Matching of funds.
251.10 Miscellaneous provisions.
AUTHORITY: 7 U.S.C. 7501–7516; 7 U.S.C. 2011–
2036.
SOURCE: 51 FR 12823, Apr. 16, 1986, unless
otherwise noted.
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§ 251.1
General purpose and scope.
This part announces the policies and
prescribes the regulations necessary to
carry out certain provisions of the
Emergency Food Assistance Act of
1983, (7 U.S.C. 612c note).
[51 FR 12823, Apr. 16, 1986, as amended at 64
FR 72902, Dec. 29, 1999]
§ 251.2 Administration.
(a) Food and Nutrition Service. Within
the United States Department of Agriculture (the ‘‘Department’’), the Food
and Nutrition Service (FNS) shall have
responsibility for the distribution of
food commodities and allocation of
funds under the part.
(b) State agencies. Within the States,
distribution to eligible recipient agencies and receipt of payments for storage and distribution shall be the responsibility of the State agency which
has: (1) Been designated for such responsibility by the Governor or other
appropriate State executive authority;
and (2) entered into an agreement with
the Department for such distribution
and receipt in accordance with paragraph (c) of this section.
(c) Agreements—(1) Agreements between
Department and States. Each State
agency that distributes donated foods
to eligible recipient agencies or receives payments for storage and distribution costs in accordance with
§ 251.8 must perform those functions
pursuant to an agreement entered into
with the Department. This agreement
will be considered permanent, with
amendments initiated by State agencies, or submitted by them at the Department’s request, all of which will be
subject to approval by the Department.
(2) Agreements between State agencies
and eligible recipient agencies, and between eligible recipient agencies. Prior to
making donated foods or administrative funds available, State agencies
must enter into a written agreement
with eligible recipient agencies to
which they plan to distribute donated
foods and/or administrative funds.
State agencies must ensure that eligible recipient agencies in turn enter
into a written agreement with any eligible recipient agencies to which they
plan to distribute donated foods and/or
administrative funds before donated
foods or administrative funds are
transferred between any two eligible
recipient agencies. All agreements entered into must contain the information specified in paragraph (d) of this
section, and be considered permanent,
with amendments to be made as necessary, except that agreements must
specify that they may be terminated
by either party upon 30 days’ written
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| File Type | application/pdf |
| File Modified | 2022-10-04 |
| File Created | 2022-10-04 |