Additional Information on FY 2020 Funding Sources for TEFAP

Introduction

In FY 2020, The Emergency Food Assistance Program (TEFAP) received a significant amount of additional funding for food purchases and administrative expenses through the Food Purchase Distribution Program (FPDP) and legislation in response to the novel coronavirus public health emergency. This memorandum will provide information on how to prioritize use of these funds in FY 2020. FY 2020 TEFAP funding sources include:

• Traditional entitlement food and administrative funds;
• Traditional Section 32 bonus purchases;
• The Families First Coronavirus Response Act (PL 116-127);
• The Coronavirus Aid, Relief, and Economic Security Act (PL 116-136);
• The Food Purchase Distribution Program (FPDP) under the authority of the Commodity Credit Corporation (CCC);
• Farm to Food Bank Projects under the Agriculture Improvement Act of 2018 (PL 115-334).

Overview of TEFAP FY 2020 Funds

The funding sources listed above provide food and administrative funding for TEFAP as follows. For additional detail on the differences among FY 2020 TEFAP funding sources, see Attachment A.

TEFAP Food Entitlement and Administrative Funds: In FY 2020, $317.50 million is authorized for TEFAP entitlement food purchases and $79.63 million for TEFAP administrative expenses through the Further Consolidated Appropriations Act of 2020 (PL 116-94). For additional information, see Fiscal Year (FY) 2020 Food and Administrative Funding for The Emergency Food Assistance Program (TEFAP).

Bonus Food Purchases: Each year, USDA purchases “bonus” foods to support agricultural markets with funds authorized by Section 32 of the Agriculture Act of 1935 (PL 74-320). These products are offered to TEFAP state agencies in addition to entitlement foods.

The Families First Coronavirus Response Act: The FFCRA provides $400 million in additional food funding for TEFAP state agencies in FY 2020. Of that $400 million, up to $100 million is available for conversion into administrative funds. In total, state agencies elected to receive $88 million in administrative funding.

The Coronavirus Aid, Relief, and Economic Security Act: The CARES Act provides $450 million in additional food funding for TEFAP state agencies in FY 2020. Up to $150 million of the funding is available as administrative funds and the remaining amount will be made available as food funds. In total, state agencies elected to receive $132 million in administrative funding. The assistance offered through the CARES Act must be used to “prevent, prepare for, and respond to coronavirus.” For additional information, see The Emergency Food Assistance Program (TEFAP): Allocation of Coronavirus Aid, Relief, and Economic Security Act Supplemental Appropriations.

Food Purchase Distribution Program: Under the statutory authority of the CCC, the U.S. Department of Agriculture is administering the FY 2020 FPDP to purchase up to $1.2 billion of FPDP foods for distribution through TEFAP. Approximately $60 million is available to eligible recipient agencies in the form of a $2,000 per-truck grant to cover costs associated with the storage and distribution of these foods. For additional information on the ERA operational grants, please reference Terms and Conditions for Funds Available for Storage and Distribution of Food Purchase and Distribution Program Foods. Additionally, FNS plans to provide up to $3.76 million in FPDP State Operational Funds to cover state costs associated with the storage and distribution of FPDP foods.

Farm to Food Bank Project Funds: Under Section 4018 of the Agricultural Improvement Act of 2018 (PL 115-334, the 2018 Farm Bill), $3.75 million in funding is available for FY 2020 Farm to Food Bank Projects. These funds are available only for a specific and distinct purpose and are not otherwise addressed in this memorandum. Please see The Emergency Food Assistance Program (TEFAP) – Farm to Food Bank Projects State Plan Requests and Fiscal Year (FY) 2021 Allocations for more information.

Priority of Use of Administrative Funds

Regular TEFAP administrative funds, FFCRA funds, and CARES Act funds are generally available for the same allowable costs. However, the funds provided under the CARES Act and the FFCRA were provided by Congress in order to address the immediate needs of the novel coronavirus public health emergency. Since CARES Act funds have a more limited purpose of coronavirus prevention, preparation, and response, these funds should be expended as soon as possible to ensure that the statutory purpose is met. Accordingly, state agencies should prioritize the spending of their administrative funds in the following order:

1. CARES Act funds. Any expenses that are allowable for both CARES Act administrative funds and regular TEFAP or FFCRA administrative funds should be first applied to CARES Act funds;
2. FFCRA funds. Any expenses that are not allowable for CARES Act funds or that are incurred after CARES Act funding is fully expended should first be applied to FFCRA funds; and
3. Regular TEFAP administrative funds. Once all CARES Act and FFCRA administrative funds are expended, allowable expenses should be applied to regular TEFAP administrative funds. A small amount of FY 2019 TEFAP administrative funds will be recovered and reallocated in FY 2020. As these FY 2019 TEFAP administrative funds will expire at the end of FY 2020, states should ensure that they only accept FY 2019 recovered funds that they will be able to expend by the end of FY 2020 and may prioritize the use of these funds accordingly.

Note that administrative funds provided under CCC authority for the FPDP are provided for the specific purpose of supporting FPDP operational costs. These funds may continue to be used for this purpose.

Reallocation of Administrative Funds

Given the priority of expending CARES Act and FFCRA administrative funds in FY 2020, the FY 2021 reallocation process for TEFAP administrative funds will be suspended and state agencies will receive any unused FY 2020 TEFAP administrative funds for use in FY 2021. Additionally, given the priority of expending CARES Act administrative funds in FY 2020, state agencies will also receive any unused FY 2020 FFCRA TEFAP administrative funds for use in FY 2021.

Should any CARES Act funds remain unused at the end of FY 2020, FNS will assess whether the funds may be reallocated to state agencies in FY 2021 depending on the status of coronavirus response activities. Should the funds be available for reallocation, FNS will provide guidance on the reallocation process at that time.

Note that unused administrative funds provided under FPDP for ERA operational costs will not be available for reallocation.

Reporting Requirements for FY 2020 Administrative Funds

In FY 2020 TEFAP is receiving administrative funding from multiple funding sources. State agencies must pay close attention to the specific reporting requirements for all funds. Regularly appropriated TEFAP administrative funds should be tracked and reported per standard procedures via the FNS-667 (OMB #0584-0293). State agencies will also be required to report via separate FNS-667 reports for both FFCRA (under FNS-667 PAN-TEFAP-Family First Act) and CARES Act funds (under FNS-667 PAN-TEFAP-CARES Act). Reporting requirements for FPDP ERA operational funds are described in Terms and Conditions for Funds Available for Storage and Distribution of Food Purchase and Distribution Program Foods.

Priority of Use of FY 2020 Food Funds

State agencies should plan to prioritize the use of CARES Act food funds and TEFAP FFCRA food funds over regular entitlement food funds. In order to assist state agencies in prioritizing the use of these funds, FNS is taking the following actions:

1. FNS will purchase TEFAP entitlement orders currently in the Web-Based Supply Management System (WBSCM) for July through December delivery with CARES Act funds. FNS will perform this task without any need for further state agency action. Once these orders have been transferred for purchase under the CARES Act, FNS will provide updated information to state agencies to show each state’s share of these orders and their remaining balance of CARES Act funds. FNS will update states’ regular TEFAP entitlement balances to reflect the transfers, because entitlement will no longer be used for these orders.
2. An emergency buy will be performed using CARES Act funds to respond to coronavirus and serve individuals in need of more immediate assistance. A defined TEFAP CARES catalog will list specific food items (“materials”) for July and August delivery. There will be a quick turnaround for states to place orders. Loads offered will be allocated proportionally to the regions/state, so states cannot exceed their allocated shares.
3. FNS will open a second TEFAP CARES catalog that will mirror regular TEFAP entitlement catalogs. Materials, delivery periods and due dates will be the same. Delivery periods will be for October 2020 and later.
4. FNS will close TEFAP entitlement catalogs for orders through December 2020 before the CARES Act catalog is opened, to ensure expenditure of CARES Act funding is prioritized.

State agencies should also plan to prioritize the use of FFCRA food funds over TEFAP entitlement funds. FFCRA catalogs will remain open with the same materials and delivery periods as the CARES catalogs. States are encouraged to place remaining FY 2020 food orders with CARES Act or FFCRA funds and not TEFAP entitlement funds. In order to assist states with prioritizing the use of these funds, states may carry over any remaining balance of TEFAP entitlement to FY 2021. FNS will not put any restrictions on the total amount of TEFAP entitlement carryover and states will not be penalized for large carryover balances. States may also carry over any remaining balance of CARES Act food funds and FFCRA food funds to FY 2021.

TEFAP bonus and FPDP foods are offered on a fair share basis throughout the year, and states should plan to continue to order these foods to meet program needs.

State agencies should contact their respective FNS regional offices with any questions.

Dana Rasmussen
Acting Director
Food Distribution Program