Senior Farmers’ Market Nutrition Program: Implementation of American Rescue Plan Act Grants

The American Rescue Plan Act of 2021 (PL 117-2, ARPA) provided the United States Department of Agriculture (USDA) with $50 million to implement SFMNP initiatives to maintain and improve supply chain resiliency, which also improves the nutrition security of eligible participants.

USDA's Food and Nutrition Service (FNS) recognizes that SFMNP plays a critical role in our Nation's nutrition assistance safety net by providing participants the ability to purchase fresh, unprepared, locally grown fruits, vegetables, herbs, and honey through local, domestic farmers’ markets, roadside stands, and community supported agriculture programs (CSAs). In addition, this program is invaluable in increasing the consumption of American agricultural foods by expanding, developing, or aiding in the development and expansion of domestic farmers’ markets, roadside stands, and CSAs. FNS is committed to supporting the success of this important program.

The COVID-19 public health emergency has made it clear that local food supply chains are resilient and dependable in making food available to their communities. FNS, through the SFMNP, is uniquely positioned to leverage local food systems to further improve food and agricultural supply chain resiliency by connecting local farmers and program participants. In accordance with Section 1001 of ARPA, FNS will provide up to $50 million in non-competitive grants to SFMNP state agencies to implement program initiatives to sustain, improve, and expand their operations and services to strengthen farmers’ markets and CSAs, and provide more support for local farmers. These ARPA grants are not intended as a long-term funding source for SFMNP but rather to implement initiatives to address immediate program needs during FY 2023 and FY 2024. This memorandum outlines SFMNP ARPA initiatives, the process for state agencies to request funds, and the SFMNP ARPA grant requirements.

Eligibility and Funding Levels

All previously participating SFMNP state agencies are eligible to request SFMNP ARPA grant funding under this announcement. To provide state agencies with the flexibility to use funds for food and/or administrative costs as needed, the SFMNP ARPA grant is awarded as a separate and distinct grant from regularly appropriated program funds. A state agency may request ARPA funds to carry out one or more of the following five initiatives during the grant’s performance period, which is effective from Oct. 1, 2022 through Sept. 30, 2024. Grant funds are available for two fiscal years.

1. Transition to an E-Solution;
2. Expand Service Area(s);
3. Serve More Eligible Seniors;
4. Issue the $50 Maximum Benefit; and/or
5. Implement Other Program Improvements.

These initiatives are intended to sustain SFMNP operations through the transition to e-solutions and increase the redemption of program benefits at existing and new farmers’ markets. By aiding in the development and expanding the use of domestic farmers’ markets, roadside stands, and CSAs, SFMNP has the ability to have a positive impact on farmers in the local food supply chain and help maintain and improve supply chain resiliency.

FNS will distribute up to $50 million in ARPA funds to SFMNP state agencies that request funding to implement the initiatives described in this memorandum. Funding of these awards will be provided through the Grant Award/Letter of Credit process. The awards will be made via a FNS-529 Grant Award Agreement between FNS and the Grantee, with accompanying terms and conditions. These grants will be awarded on a non-competitive basis, subject to the reasonableness of state agencies’ funding requests and the availability of federal funds. For more information on how to submit funding requests for each of the five initiatives, please see Appendix B, Background & Instructions for state Agency Requests by Initiative Type.

How to Apply

To apply for an SFMNP ARPA grant, the SFMNP state agency must submit a funding request to the appropriate FNS regional office (RO) point-of-contact via email that contains all the required elements and the required federal forms noted below no later than Nov. 21, 2022.

The state agency’s funding request must include the following required elements, which the state agency may choose to submit using the optional template in Appendix A:

• Date;
• State Agency Name;
• Submitter’s Name and Title;
• FY 2022 SFMNP Total Grant;
• FY 2022 SFMNP Benefit Level per Participant;
• FY 2022 Total SFMNP Federal Participants;
• FY 2022 Total Value of Coupons Issued;
• The amounts of ARPA funds requested for FY 2023 and FY 2024 for one or more of the following initiatives:
  1. Transition to an E-Solution;
  2. Expand Service Area(s);
  3. Serve More Eligible Seniors;
  4. Issue the $50 Maximum Benefit; and/or
  5. Implement Other Program Improvements.
• A description of initiatives for which funding is requested.
• A statement which reads as follows: “Consistent with the American Rescue Plan Act of 2021(PL 117-2, ARPA) Section 1001, proposed initiatives will contribute to maintaining or improving food and agricultural supply chain resiliency;” and
• A description of how such initiative(s) will contribute to maintaining or improving supply chain resiliency.

A complete application must include:

• All the required elements of the state agency’s funding request;
• SF-424 Application for Federal Assistance;
• SF-424A Budget Information for Non-Construction;
• SF-424B Assurances - Non-Construction Programs; and
• SF-LLL Disclosure of Lobbying Activities

All standard forms (SF) listed above can be found at Grants.gov.

FNS Regional Office Review

FNS RO Supplemental Nutrition Programs (SNP) staff will provide technical assistance to SFMNP state agencies to ensure applications contain all requirements noted above. As applications are received, RO SNP staff will review the submissions for completeness and follow up with state agencies on any missing requirements. RO SNP staff will the review complete applications to determine if the state agency’s estimated costs requested for each of the initiatives for each fiscal year would be reasonable, necessary, and allocable charges to the SFMNP ARPA grant. To receive federal funding, the state agency must have a signed FY 2023 SFMNP state plan at the time the SFMNP ARPA grant agreement is awarded.

State Plan Amendments

During the review of a state agency’s grant application, RO SNP staff also will determine which of the state agency’s initiatives will require an approved state plan amendment. Any required state plan amendments will need to approved before the state agency can receive a fully executed FNS-529 Grant Award Agreement. A state agency may only begin obligating funds for the costs of implementing those initiatives once a fully executed FNS-529 Grant Agreement is in place.

Prior to obligating SFMNP ARPA grant funds for a Transition to E-Solution initiative, the state agency must have an approved state plan amendment in accordance with Appendix B of the WIC FMNP and SFMNP FY 2022 Guidance Package. In addition, the state agency will need to have an approved state plan amendment to reflect any changes in program operations necessary to implement other initiatives (e.g., Expand Service Area(s) and Issue the $50 Maximum Benefit) prior to obligating funds for those initiatives. RO SNP staff will need to begin working with state agencies on the required state plan amendments as part of the FY 2023 SFMNP state plan approval process.

Upon notification from the National Office of the FNS Administrator’s approval, RO SNP staffs will work with RO Grant Management Administrative Services (GMAS) staff on the FNS-529, Grant Award Document, for approved grants. The state agency must have a signed FY 2023 SFMNP state plan at the time the SFMNP ARPA grant agreement is executed and, as noted above, amended accordingly. RO GMAS will make funds available to state agencies for the approved SFMNP ARPA grants after the grant agreements are fully executed (i.e., signed by both FNS and the state agency).

RO SNP staff will send a zip file with their funding recommendations and state agency applications to the FNS National Office point of contact via email to Hayes.Brown@usda.gov no later than Dec. 5, 2022.

Award Requirements

State Plan: The state agency must have a signed FY 2023 SFMNP state plan at the time the SFMNP ARPA grant agreement is executed.

Grant Agreement: When awards are made, state agencies and FNS must sign a FNS-529 Grant Award form. A fully executed FNS-529 agreement, with terms and conditions, will serve as the official grant agreement.

Catalog of Federal Domestic Assistance (CFDA): The Catalog of Federal Domestic Assistance (CFDA) number for this grant project award is: 10.576.

Period of Performance

The period of performance for the SFMNP ARPA grants is from Oct. 1, 2022 through Sept. 30, 2024. All funding must be obligated by state agencies no later than Sept. 30, 2024, and liquidated during the subsequent 120-day closeout period. Implementation of the ARPA initiatives begins in FY 2023 with funds available for two fiscal years to ensure full use of the SFMNP ARPA grants.

Use of Funds

All expenditures charged to the SFMNP ARPA grant must be reasonable and necessary and comply with 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards). Since the actual expenditures to implement individual initiatives may be higher or lower than the estimates in the state agency’s funding request, the state agency is permitted to charge the total actual expenditures of implementing all of the initiatives for which it received funding to its ARPA grant. Based on its FY 2023 actual expenditures, the state agency may need to adjust its budget for its FY 2024 initiatives to support the full use of its ARPA grant. state agencies should refer to their Grant Award Agreement Term and Conditions for budget revision requirements.

Cost Allocation Requirements

Although the SFMNP annual grants, which state agencies receive from the annual appropriation and reallocations of unspent prior year funds, and the SFMNP ARPA grant both support program operations, there is a need to allocate program costs between the two grants. Since the SFMNP annual food and administrative grants cover the cost of regular program operations (e.g., the FY 2022 service area(s), FY 2022 benefit level, FY 2022 participation, and FY 2022 total value of coupons redeemed), the costs associated with state agencies implementing the various ARPA initiatives should be charged to the SFMNP ARPA grant. As the burden to precisely allocate costs between the SFMNP annual grant and the SFMNP ARPA grant not only outweighs the benefit of but also undermines the purpose of providing a separate grant to allow state agency flexibility to make immediate program improvements, state agencies may use basic methods to allocate the costs between their SFMNP annual grants and their SFMNP ARPA grants. Examples are provided in Appendix C, Cost Allocation Methods.

In addition to the food expenditures, the state agency may use the same cost allocation method to allocate the administrative expenditures associated with the increase in benefit level and/or participation (e.g., coupon processing costs) to the SFMNP annual administrative grant and the SFMNP ARPA grant. In the event of higher redemption rates during FY 2023 or FY 2024, the state agency may charge any over-expenditure of its SFMNP food and/or administrative grants resulting from this cost allocation method to its SFMNP ARPA grant.

Reporting Requirements

The SFMNP ARPA grants and expenditures must be reported separately on a SF-425, Financial Status Report, entitled, “PAN-SFMNP-ARPA”. This grant requires separate reporting from the state agency’s SFMNP annual food and administrative grants and expenditures reported on the FNS-683A (SFMNP Annual Financial and Program Data Report). Since the SF‑425, Financial Status Report, is a standard form that only captures financial data and does not capture program data (e.g., participants, farmers, etc.), the state agency will include the additional participants, authorized outlets, and coupons issued and redeemed associated with implementing the ARPA initiatives in the federal program data reported on its FNS-683A. The state agency must submit an annual and a final SF-425, Financial Status Report, in the Food Programs Reporting System (FPRS) under PAN-SFMNP-ARPA at the same time as its FY 2023 and FY 2024 FNS-683A reports.

At the same time its FNS-683A and SF-425 reports are due, the state agency also must submit an annual progress report via the FNS-908, Performance Progress Report in PDF form to the RO SNP contact noted above. The state agency will report its performance progress in the narrative portion of the FNS-908. Upon completion of the grant, the state agency must submit a final summary using the narrative portion of the FNS-908 to include evaluation results of the SFMNP initiatives to maintain and improve supply chain resiliency, as evidenced by implementing an e-solution, expanding the service area(s), increasing the redemption of program benefits, and/or implementing other program improvements. These reporting requirements will be incorporated into the SFMNP Annual Closeout Guidance that is issued to ROs and SFMNP state agencies each year. Financial and Performance Report timeframes will also be outlined in the accompanying Grant Award Agreement Terms and Conditions.

Audit Requirements

These ARPA grants will be subject to audit by multiple federal agencies. The state agency must comply with all recordkeeping requirements contained at 7 CFR §249.23(a) to maintain full and complete records that document the charges made to the ARPA grant.

If you have any questions about this memorandum, please contact the appropriate FNS regional office.

Mary Rose Conroy
Director
Food and Technology Division
Supplemental Nutrition and Safety Programs