Final Rule: Child Nutrition Program Integrity

Summary

This action implements statutory requirements and policy improvements to strengthen administrative oversight and operational performance of the child nutrition programs.

Dates

Effective date: The provisions of this rulemaking are effective Sept. 22, 2023.

Compliance dates: This rulemaking consists of multiple provisions. Compliance for each provision is referenced in the Supplementary Information section of this final rule and detailed in the section-by-section analysis.

Background

FNS cannot accomplish its mission to provide access to food, a healthful diet, and nutrition education in ways that inspire public confidence without a strong and sustained effort to ensure that integrity is always a priority in the administration of the child nutrition programs. On March 29, 2016, FNS published a proposed rule, Child Nutrition Program Integrity, 81 FR 17564, https://www.fns.usda.gov/cn/fr-032916, to address criteria and procedures to strengthen administrative oversight and operational performance of the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program (SMP), Summer Food Service Program (SFSP), Child and Adult Care Food Program (CACFP), and State Administrative Expense Funds (SAE).

Many of the modifications proposed by FNS were based on amendments to the Richard B. Russell National School Lunch Act (NSLA), 42 USC 1751 et seq., , mandated by the Healthy, Hunger-Free Kids Act of 2010 (PL 111–296) including:

• Implementation of fines;
• Prohibition of participation of any terminated entity or terminated individual in any child nutrition program;
• Termination and disqualification of SFSP sponsors and unaffiliated CACFP centers through extension of the serious deficiency process;
• Termination of permanent agreements of SFSP sponsors and CACFP institutions and facilities;
• More frequent reviews of CACFP institutions that are at risk of having serious management problems;
• State agency liability for payments when hearings for CACFP institutions are delayed; and
• Additional state agency funding for audits of CACFP institutions.

These provisions were added to the NSLA to strengthen the administration of child nutrition programs, at all levels, through enhanced oversight and enforcement tools. They were designed to help FNS and state administering agencies reduce program error of all types, resulting in more efficient operations and improved compliance with program requirements.

The proposed rule also incorporated recommendations from the USDA Office of Inspector General (OIG), including management decisions from audits— National School Lunch Program—Food Service Management Company Contracts, published January 2013, https://usdaoig.oversight.gov/reportsaudit/national-school-lunch-program-food-service-management-company-contracts, and Review of Management Controls for the Child and Adult Care Food Program, published November 2011—and FNS management evaluations of state agency administration of NSLP, SBP, SFSP, and CACFP. The recommendations address improvements to contract management, adherence to federal procurement standards, and financial oversight to further enhance program integrity.

This final rule adds strong integrity safeguards to a variety of aspects of the child nutrition programs. The provisions codified in this rulemaking are designed to increase program operators' accountability and operational efficiency, while improving the ability of FNS and state agencies to address severe or repeated violations of program requirements. This rulemaking also provides states and program operators with targeted flexibilities which allow oversight efforts to be tailored to specific program circumstances. These provisions will be effective on Sept. 22, 2023. However, each provision has a separate compliance date for implementation, which is explained in the section-by-section analysis. Although the proposed rule required implementation for most provisions 90 days after publication of the final rule, numerous respondents requested a 1-year delay in implementation, and FNS agrees that additional time is needed to implement this rulemaking. The extended implementation period gives state agencies time to make necessary systems changes, and gives FNS time to provide technical assistance and develop resources to support successful implementation.

FNS intends each of the provisions of this rule to be severable. Were a court to stay or invalidate any provision of this rule, or to hold a provision unlawful as applied in certain factual circumstances, FNS would intend that all other provisions set forth in this rule remain in effect to the maximum possible extent.