FY 2021 Food and Administrative Funding for The Emergency Food Assistance Program

Introduction

Seven pieces of legislation currently govern the level of food and administrative resources available to TEFAP in FY 2021:

• The Agriculture Improvement Act of 2018 (PL 115-334);
• The Food and Nutrition Act of 2008 (PL 88-525, as amended);
• The Emergency Food Assistance Act of 1983 (PL 98-8, as amended);
• The Further Consolidated Appropriations Act, 2020 (PL 116-94);
• The Families First Coronavirus Response Act (PL 116-127);
• The Coronavirus Aid, Relief, and Economic Security Act (PL 116-136); and
• The Consolidated Appropriations Act, 2021 (PL 116-260), which provides full-year and supplemental TEFAP funding through Sept. 30, 2021.

Please see Attachment A for an overview of all FY 2021 appropriated funding sources for TEFAP and Attachment B for a summary of key requirements and differences of FY 2021 TEFAP administrative funds.

Food Funds

Section 27(a) of the Food and Nutrition Act of 2008 established the amount of funding available for TEFAP food purchases for FY 2009, and indexes that amount to annual changes in the Thrifty Food Plan (TFP), which is also used to determine the maximum benefit level for the Supplemental Nutrition Assistance Program (SNAP). Section 4018 of the Agriculture Improvement Act of 2018 maintained the funding formula established in Section 27(a) of the Food and Nutrition Act of 2008. The Agriculture Improvement Act of 2018 also added specified amounts annually, separate and distinct from the inflationary adjustments referenced above. In FY 2021, the amount available for TEFAP; food purchases has been calculated by adding the FY 2009 TFP-adjusted funding level plus an additional $35 million.

Based on changes in the TFP and the additional funds from the Agriculture Improvement Act of 2018, the amount available for TEFAP food purchases through the FY 2021 Appropriations Act is $342 million. Of this, $6.41 million is needed to pay costs associated with ordering and transporting the food, leaving $335.59 million for the purchase of food.

The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (COVID Third Supplemental), signed into law as part of the 2021 Appropriations Act, provided an additional $400 million in food funding for TEFAP in FY 2021. Of that $400 million, up to 20 percent, or $80 million, was available for conversion to administrative funding. TEFAP state agencies chose to accept a total of $323,970,109 as food funds and $73,279,891 as administrative funds. Funds provided through the COVID Third Supplemental are available through Sept. 30, 2021, and will expire at the end of this fiscal year. State agencies should plan to fully utilize their supplemental food funds before the end of the current fiscal year.

Carryover of FY 2020 Food Funds

Section 27(a) of the Food and Nutrition Act of 2008 allows funds authorized for the purchase of TEFAP food to remain available for two fiscal years, subject to such terms and conditions as determined by USDA. Therefore, states are able to keep any remaining TEFAP food entitlement balance at the end of a fiscal year and place orders against it during the subsequent fiscal year. However, funds remaining at the end of the second fiscal year after which they were initially appropriated will no longer be available to USDA and will be unavailable for states to place orders against. In other words, any remaining state balance of FY 2020 TEFAP food entitlement will expire at the end of FY 2021 (Sept. 30, 2021). Thus, state agencies should ensure that any carryover FY 2020 food entitlement balance is expended by the end of this fiscal year.

In FY 2021, TEFAP state agencies also have access to any carryover food funds provided through the FFCRA and the CARES Act in FY 2020. As with FY 2020 TEFAP food entitlement funds, FFCRA and CARES Act food funds will expire at the end of FY 2021 (Sept. 30, 2021). State agencies should ensure that any remaining balances of FFCRA or CARES Act food funds are expended by the end of the fiscal year.

Conversion of Food Funds to Administrative Funds

TEFAP state agencies have the opportunity to convert their fair-share of up to 20 percent of their entitlement food funds into TEFAP administrative funds. Accordingly, $68.4 million in FY 2021 TEFAP entitlement food funds is available for conversion into TEFAP administrative funds. FNS Headquarters must be informed by March 31, 2021, whether TEFAP state agencies want to accept their portion of the convertible $68.4 million as food funds, administrative funds, or any combination of the two.

Administrative Funds and their Conversion

The 2021 Appropriations Act includes $79.63 million in TEFAP administrative funds. Through Dec. 11, 2020, per the terms of a Continuing Resolution, TEFAP received a pro-rated portion of the level of administrative funds it received in FY 2020 totaling $15,710,999. An additional allowance of administrative funds totaling $9,818,379 was made available after Jan. 5, 2021. The remaining $54,100,622 in appropriated funds was released to TEFAP state agencies on Jan. 13, 2021.

As always, TEFAP state agencies may convert any portion of their administrative funds into food funds. FNS Headquarters must be informed by April 30, 2021, regarding what portion, if any, of their administrative funds TEFAP state agencies wish to convert to food funds.

In FY 2021, states also have access to $73,279,891 in administrative funds provided through the COVID Third Supplemental. These administrative funds will expire at the end of FY 2021 and will not be available for reallocation in FY 2022. State agencies should make every effort to expend COVID Third Supplemental administrative funds before the end of the current fiscal year. In FY 2021, TEFAP state agencies should carefully consider the amount of administrative funding available through regular and supplemental sources in making conversion decisions. States should only convert an amount of administrative funds that they are able to obligate by Sept. 30, 2021.

Return and Reallocation of FY 2020 Administrative Funds

In FY 2021, TEFAP state agencies will receive any unused FY 2020 regular TEFAP administrative funds, FFCRA administrative funds, and CARES Act administrative funds back for use in FY 2021, as per the terms of the June 12, 2020, memorandum, Additional Information on FY 2020 Funding Sources for TEFAP and subsequent guidance issued by FNS. CARES Act administrative funds, including returned and reallocated CARES Act funds, may only be used to “prevent, prepare for, and respond to coronavirus.” Thus, in order to receive reallocated CARES Act funds, state agencies will be required to reconfirm that they are able to use the returned funds in line with the terms of the April 24, 2020 memo, TEFAP: Allocation of CARES Act Supplemental Appropriations. State agencies with unused CARES Act administrative funds available for return in FY 2021 will be contacted separately regarding reconfirmation of these funds.

All returned and reallocated FY 2020 administrative funds will expire at the end of FY 2021. State agencies should make every effort to expend the funds fully before the end of the fiscal year.

Priority of Use of Administrative Funds

Regular TEFAP administrative funds, FFCRA funds, CARES Act funds, and COVID Third Supplemental administrative funds that will be available to state agencies in FY 2021 are generally available for the same allowable costs. However, several of these funding sources will expire on Sept. 30, 2021. This means that those funds will be unavailable to USDA after that date and are thus unavailable for reallocation to state agencies in FY 2022. Accordingly, state agencies should prioritize the spending of administrative funds that will expire at the end of FY 2021 above newly appropriated regular administrative funds that will expire at the federal level at the end of FY 2022. For information on FY 2021 TEFAP administrative funds, please see Attachment B.

FY 2021 Entitlement and Administrative Funding Worksheets

Previously in this fiscal year, FNS provided four worksheets to TEFAP state agencies detailing administrative funding allocations under Continuing Resolutions in FY 2021, the subsequent 28-day allowance, full year administrative funding, and the initial allocation of food funding from the COVID Third Supplemental. Attached, please find the FY 2021 food and administrative funding worksheets that provide further details regarding FY 2021 TEFAP funding.

1. Worksheet #4 shows each state's share of the $15,710,999 in FY 2021 TEFAP administrative funds that has been provided under the first Continuing Resolution as well as each state’s share of $9,818,379 provided under the remaining Continuing Resolutions and 28-day allowance. Finally, it shows the remaining $54,100,622 in appropriated funds allocated under the final FY 2021 Appropriations Act, and the total of these amounts.
2. Worksheet #5 shows each state's allocation of FY 2021 TEFAP food funds provided in the Food and Nutrition Act that are not convertible to administrative funds, each state’s share of convertible funds, each state’s FY 2020 carryover balance of entitlement foods available in FY 2021, and the total of these amounts. Each state’s FY 2020 entitlement carry over balance available in FY 2021 was determined based on an entitlement summary report pulled from the Web-Based Supply Chain Management system on Jan. 12, 2021.

Conclusion

Please note all TEFAP food and administrative funds are subject to apportionment by the Office of Management and Budget (OMB). We will keep you informed regarding the availability of these funds.

To review, FNS Headquarters must be informed whether TEFAP state agencies want to (a) accept their remaining portion of the $68.4 million in convertible TEFAP food funds as food funds, administrative funds, or some combination of the two by March 31, 2021; and (b) convert any portion of their administrative funds into food funds by April 30, 2021. Regional office staff will provide further guidance on applicable timeframes for submission to their offices, which will enable them to provide the information to FNS Headquarters in a timely manner.

Laura Castro
Director
Food Distribution Division

Attachments

• Attachment A - Overview of 2021 Appropriated Funding Sources for TEFAP
• Attachment B – Summary of FY 2021 TEFAP Administrative Funds