Service Fees for On-line Prepayment of Meals

Nutrition Services Division Management Bulletin

Purpose: Policy, Beneficial Information

Reference: United States Department of Agriculture, Food and Nutrition Service Instruction 782-6, Fees for Lunchroom Services; Title 7, Code of Federal Regulations, Part 210

Subject: Service Fees for On-line Prepayment of Meals

This Management Bulletin (MB) provides guidance regarding service fees charged to households for on-line meal prepayment options in the National School Lunch Program and the School Breakfast Program (NSLP and SBP).

The United States Department of Agriculture, Food and Nutrition Services (FNS) Instruction 782-6, Fees for Lunchroom Services, states that children participating in School Nutrition Programs shall not be charged any additional fees for supervisory or other services provided in conjunction with the delivery of benefits under these programs. The FNS wrote this instruction prior to on-line meal services becoming a viable option for the NSLP/SBP.

In order to be compliant with FNS Instruction 782-6, Local Educational Agencies (LEA) should follow the guidelines below when implementing a service fee for on-line prepayment of meals:

1. The LEA must apply the service fee charge to the household in a way that does not directly impact the meal price charged to the child, such as separating the fee from the meal charge and/or payment.
2. The LEA must provide the household with the opportunity to make payments through alternative methods—paying by check and/or cash in person at the point of sale, mailing a personal/cashiers check to the school, or personally delivering a personal/cashiers check to the school food service central office, in addition to the on-line payment option(s).
3. If the CDE finds that an LEA does not have an alternative payment method in addition to an on-line payment method that includes a service fee, the LEA would be found out of compliance with the requirements in Title 7, Code of Federal Regulations (7 CFR), Part 210, and with FNS Instruction 782-6.

FNS Instruction 782-6 states that the LEA cannot charge a service fee to the child for any service. However, this instruction does not address the more recent banking and fee-for-service options that exist, including how to provide payment options to the LEA’s adult customers who desire the availability of on-line payment systems. Further, the Instruction is silent on the LEA’s ability to charge a fee to an adult. Therefore, as long as the LEA is providing other prepayment options, a fee charged to an adult customer is allowable.

Also, 7 CFR, Section 245.2 (Definitions) states that a reduced-price meal cannot exceed 40 cents for lunch or 30 cents for breakfast. In summary, it is clear that federal regulations intend for a child to be charged no more than the legislated amount for meals. An on-line service fee is not a meal charge and the guidance in FNS Instruction 782-6 (above) would apply here.

If you have any questions regarding this subject, please contact the California Department of Education, Nutrition Services Division, Resource Management Unit by email at SNPCafeFundQuestions@cde.ca.gov.