The purpose of this audit guidance policy memorandum is to clarify the options available to state distributing agencies or recipient agencies in assigning value to USDA donated foods for audit purposes.

This memorandum provides general guidance on the various procurement groups FNS has identified, how to use each group in a way that complies with federal procurement standards, and supersedes SP 35-2012, Procuring Services of Purchasing Cooperatives, Group Purchasing Organizations, Group Buying Organizations, etc., dated June 12, 2012.

The purpose of this proposed rule is to incorporate this procurement option in the programs' regulations and to define the term "unprocessed locally grown or locally raised agricultural products'' to ensure that both the intent of Congress in providing for such a procurement option is met and that any such definition will facilitate ease of implementation for institutions participating in the child nutrition programs.