Pricing of Adult Meals in the NSLP/SBP

This management bulletin (MB) supersedes the California Department of Education (CDE) Management Bulletin 00-111: Adult and Sibling Meals in the National School Lunch (NSLP) and School Breakfast Programs (SBP). The purpose of this MB is to clarify the requirements on the pricing of adult meals in the NSLP and SBP as defined in the U.S. Department of Agriculture (USDA) Food and Nutrition Service (FNS) Instruction 782-5, Revision 1 (1988).

Background

The National School Lunch Act of 1946 and Child Nutrition Act of 1966 aim to safeguard the health and well-being of the country’s children. For those participating schools and institutions which claim reimbursement in the NSLP and SBP, federal assistance is intended to meet the nutritional needs of children. Conversely, program meals served to adults are not eligible for cash reimbursement under authorizing federal legislation and regulations. School food authorities (SFA) must ensure that the federal reimbursements, children’s payments, and other food service revenues (i.e., state reimbursement), and USDA Foods do not subsidize program meals served to adults.

USDA FNS instructions stipulate that the price of an adult meal must fully cover all costs incurred in the production of the meal, including USDA Food fair market value. Historically, when establishing the adult meal price, SFAs have commonly used a 50 cent markup to the paid student meal price. As the reimbursement for paid meals and the per meal value of USDA Foods have increased over the years, a 50 cent markup method to price adult meals may not be in compliance with FNS instruction.

Note: The CDE is in the process of updating the Child Nutrition Information and Payment System (CNIPS) site application for the adult meal price requirements. Beginning in School Year 2021–22, SFAs should price adult meals according to federal regulations to ensure that the price of an adult meal must fully cover all costs incurred in the production of the meal, including USDA Food fair market value.

Adult Meal Guidelines

Definition

The USDA FNS defines adult meals as program meals served to adults. An adult meal consists of all the components in reimbursable meals offered to students. If only the main dish or entrée is served without the components of a reimbursable meal, it would be considered a separate or a la carte item and therefore, not an adult meal. Program meals served to teachers, administrators, custodians, and other adults are considered adult meals.

Meals Served to Nonstudents

California Education Code (EC) 38082 prohibits the sale of food to anyone except pupils, and employees of any school district or members of the governing board, etc. In accordance with EC 38082, school boards may, through formal resolution, exempt individuals and organizations from the requirements in this section. Note that the cost of any meals served to nonstudents may not be subsidized by federal or state reimbursements, children's payments, other nonprofit food service revenues, or USDA Foods.

A Nonprogram Food

An adult meal is further classified as a nonprogram food. A nonprogram food is sold in a participating school other than a student reimbursable meal, and it is purchased using the SFA’s cafeteria fund (also known as the nonprofit school food service account). Revenues from the sale of adult meals must meet nonprogram food requirements. To learn more about nonprogram food requirements, review the CDE Revenue for Nonprogram Foods-Updated Guidance web page at https://www.cde.ca.gov/ls/nu/sn/mbsnp042016.asp [The prior MB has been superseded and please see the updated guidance at https://www.cde.ca.gov/ls/nu/sn/mbsnp032024.asp].

Meals Served to Food Service Staff

Meals served to adults who are directly involved in the operation and administration of the School Nutrition Programs (SNP) may, at the discretion of the SFA, be furnished at no charge. In general, positions eligible for this benefit are funded by the cafeteria fund and dedicate the majority of their time supporting SNPs. As such, their cost may be fully attributed to and supported by the nonprofit food service operation. These meals are a program benefit and are not classified as adult meals. Meals served to these adults may not be claimed for reimbursement or counted towards the donated foods entitlement.

Per USDA FNS Instruction 782-5, Revision 1 (1988), the determination of individuals, positions involved, and the degree to which their services are attributed to the nonprofit food service operations is left to state and local officials. Meals provided to designated positions for breakfast in the classroom and preschool family style meal service may qualify as support of the operation and administration of the SBP. To demonstrate the allowability of these meals, SFAs should have a written policy that designates positions for this benefit.

Sales Tax

Sales of adult meals may be taxable. Guidance can be obtained from the California Department of Tax and Fee Administration’s Nonprofit Organizations web document at https://www.cdtfa.ca.gov/formspubs/pub18.pdf. SFAs should contact the California Department of Tax and Fee Administration if they have questions regarding sales tax.

Adult Meal Pricing

In accordance with USDA FNS instruction, the price of an adult meal must fully cover all costs including USDA Foods fair market value. There are three options for determining the adult meal price:

• Using available cost data such as the price paid for vended meals or the contracted amount paid to a food service management company.
• Demonstrating a reasonable method for determining the adult meal price. For example, an SFA may use the cost of food, labor, and supplies for the most expensive reimbursable student meal plus the fair market value of USDA Foods as a reasonable method to determine the adult meal price.
• Using the SNP Adult Meal Pricing Tool to calculate the minimum adult meal price for lunch and breakfast. This tool uses reimbursement and USDA Foods values to determine the price for pricing and nonpricing sites. The tool can be found in the download forms section of the CNIPS.

Administrative Review

Supporting documentation for establishing adult meal price and payment to the cafeteria fund must be made available during an administrative review. When a comprehensive review is conducted in the area of Revenue from Nonprogram Foods, the CDE reviewer will determine the following:

• If the SFA sold breakfasts and lunches to teachers, administrators, custodians, and other adults: Did the adult meal payment in combination with any per-lunch revenues from other sources designated specifically for the support of adult meals (e.g., state or local fringe benefit or payroll funds or funding from voluntary agencies) sufficiently cover the overall cost of the adult meal?
• If the SFA served adult meals at nonpricing sites or served adult meals free of charge to adults not directly involved in the meal service, how was the cafeteria fund reimbursed in full for the cost of all adult meals served? Was the process of recovering the full cost of the meal served sufficient?
• If the SFA served adult meals, what process did the SFA use to ensure that all funds received from the sale of nonprogram foods were deposited into the SFA’s cafeteria fund?

Contact Information

If you have any questions regarding this subject, cafeteria fund policy, or regulations, please contact the CDE Nutrition Services Division Resource Management Unit at SNPCafeFundQuestions@cde.ca.gov.

If you have questions relating to USDA Foods, please contact the CDE Food Distribution Program at FoodDistribution@cde.ca.gov.

Kim Frinzell, Director
Nutrition Services Division