FY22 Food and Administrative Funding for TEFAP

Introduction

Seven pieces of legislation currently govern the level of food and administrative resources available to TEFAP in FY 2022:

• The Agriculture Improvement Act of 2018 (PL 115-334, the 2018 Farm Bill);
• The Food and Nutrition Act of 2008 (PL 88-525, as amended);
• The Emergency Food Assistance Act of 1983 (PL 98-8, as amended);
• Division B, Title 1, Office of the Secretary, The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (PL 116-136);
• The Consolidated Appropriations Act, 2021, (PL 116-260, the 2021 Appropriations Act); and
• The Consolidated Appropriations Act, 2022 (PL 117-103, the 2022 Appropriations Act), which provides full-year and supplemental TEFAP funding through Sept. 30, 2022.

Please see Attachment A for a summary of key requirements and differences of FY 2022 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. Additionally, the Agriculture Improvement Act of 2018 required USDA to re-evaluate the Thrifty Food Plan (TFP) by 2022 and every 5 years thereafter based on current food prices, food composition data, consumption patterns, and dietary guidance. Additional information about this adjustment can be found in the Aug. 16, 2021 memorandum, The Emergency Food Assistance Program (TEFAP): Thrifty Food Plan (TFP) Adjustment of TEFAP Funding. In FY 2022, the amount available for TEFAP food purchases has been calculated by adding the FY 2009 TFP-adjusted funding level plus an additional $57.75 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 2022 Appropriations Act is $399.74 million. Of this, $6.13 million is needed to pay costs associated with ordering and transporting the food, leaving $393.61 million for the purchase of food.

In addition to the amounts above, USDA is also providing $500 million in supplemental TEFAP funding as part of the Build Back Better Initiative. These funds were provided through Division B, Title 1, Office of the Secretary of the Coronavirus Aid, Relief, and Economic Security Act. State agencies had the option to accept their share of up to $100 million as administrative funds. TEFAP state agencies chose to accept a total of $99,734,761 as administrative funds, and the remaining $400,265,239 is being used for TEFAP food purchases. For more details about these TEFAP food funds, please refer to the Aug. 4, 2021 memorandum, TEFAP: Allocation of Supplemental Food and Administrative Funds from Division B of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Carryover of State TEFAP Food Entitlement

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 the first 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 2021 TEFAP food entitlement will expire at the end of FY 2022 (Sept. 30, 2022). Thus, state agencies should ensure that any carryover FY 2021 food entitlement balance is expended by the end of this 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, $79.95 million in FY 2022 TEFAP entitlement food funds are available for conversion into TEFAP administrative funds. FNS headquarters must be informed by May 11, 2022, whether TEFAP state agencies want to accept their portion of the convertible $79.95 million as food funds, administrative funds, or any combination of the two.

Administrative Funds and their Conversion

The 2022 Appropriations Act includes $81 million in TEFAP administrative funds. Through Dec. 03, 2021, per the terms of a continuing resolution, TEFAP received a pro-rated portion of the level of administrative funds it received in FY 2021 totaling $13,959,139. An additional allowance of administrative funds totaling $16,801,930, was made for the second continuing resolution through Feb. 18, 2022. A third allowance of $12,112,855 was allocated on March 30, 2022, which included funds from the third continuing resolution and a 30-day allocation. The remaining $38,126,076 in appropriated funds will be released to TEFAP state agencies as soon as the funds are available.

As part of the Build Back Better Initiative, $100 million in supplemental administrative funds were made available to state agencies in early FY 2022, in the amounts requested by state agencies from their allocations. TEFAP state agencies chose to accept a total of $99,734,761 as administrative funds. The remaining $400,265,239 is being used for TEFAP food purchases. For more details about these TEFAP administrative funds, please refer to the Aug. 4, 2021 memorandum, TEFAP: Allocation of Supplemental Food and Administrative Funds from Division B of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

As always, TEFAP state agencies may convert any portion of their administrative funds into food funds. FNS headquarters must be informed by May 13, 2022, regarding what portion, if any, of their administrative funds TEFAP state agencies wish to convert to food funds.

In FY 2022, 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, 2022.

Return and Reallocation of FY 2021 Administrative Funds

In FY 2022, TEFAP state agencies will receive back any unused FY 2021 regular TEFAP administrative funds, as per the terms of the July 13, 2021 memorandum, Return of FY 2021 Administrative Funds for The Emergency Food Assistance Program (TEFAP). FY 2021 funds converted from food to administrative funds will not be returned to state agencies for administrative costs in FY 2022.

All returned and reallocated FY 2021 administrative funds will expire at the end of FY 2022. State agencies should make every effort to expend the funds fully before the end of the fiscal year.

Reallocation of Administrative Funds in FY 2023

To respond to the ongoing COVID-19 pandemic, FNS suspended the normal reallocation process for regularly appropriated FY 2020 TEFAP administrative funds. State agencies were provided an opportunity to receive their unused FY 2020 funds, back for use in FY 2021, per the Feb.16, 2021 memorandum, FY 2021 Food and Administrative Funding for The Emergency Food Assistance Program policy memo. FNS again suspended the normal reallocation process for regularly appropriated FY 2021 TEFAP administrative funds, as discussed above.

For FY 2022 administrative funds, FNS will return to the normal process. Any FY 2022 TEFAP administrative funds that remain unused after the close of FY 2022 will be reallocated among all states in FY 2023 based on the TEFAP funding formula.

FY 2022 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 2022, 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 2022 food and administrative funding worksheets that provide further details regarding FY 2022 TEFAP funding.

1. Worksheet #5 (pdf) shows each state’s share of the $13,959,139 in FY 2022 TEFAP administrative funds that has been provided under the first continuing resolution as well as each state’s share of $16,801,930 provided under the second continuing resolution, and the $12,112,855 provided under the remaining continuing resolutions and the 30-day funding. Finally, it shows the remaining $38,126,076 in appropriated funds allocated under the final FY 2022 Appropriations Act, and the total of these amounts.
2. Worksheet #6 (pdf) shows each state’s allocation of FY 2022 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 2021 carryover balance of entitlement foods available in FY 2022, and the total of these amounts. Each state’s FY 2021 entitlement carryover balance available in FY 2022 was determined based on an entitlement summary report pulled from the Web-Based Supply Chain Management system on March 30, 2022.

Conclusion

To review, FNS headquarters must be informed whether TEFAP state agencies want to (a) accept their remaining portion of the $79.95 million in convertible TEFAP food funds as food funds, administrative funds, or some combination of the two by May 11, 2022; and (b) convert any, portion of their administrative funds into food funds by May 13, 2022. Regional office staff will provide further guidance on applicable time frames 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

Attachment

• Attachment A: Summary of FY 2022 TEFAP Administrative Funds (pdf)