The USDA provided schools with Supply Chain Assistance Funds in school years 2021-22 and 2022-23. These are extra funds to offset the costs incurred due to supply chain issues.
This article will explain how schools can remain compliant by documenting their purchases using these funds.
What Can I Buy with Supply Chain Assistance Funds?
Per USDA rules, the items must be domestic and unprocessed or minimally processed.
Some examples of allowable items, according to the USDA are:
- Fluid milk (flavored or unflavored), cheese, yogurt (flavored or unflavored)
- Fruits and vegetables (including 100% juice)
- Grain products (pasta, rice)
- Meats (whole, pieces, or ground)
- Meat alternates (beans, legumes)
Items can be in any state: whole, cut, pureed, etc. Additionally, they can be fresh, frozen, canned, or dried.
On the other hand, some examples of items that cannot be purchased with SCA funds are:
- Processed entrees (pizza, chicken nuggets)
- Baked goods (breads, muffins, crackers)
- Prepackaged meals or sandwiches
- Non-domestic items
If you’re unsure whether an item can be purchased with SCA funds, it’s best to check with your state agency.
State agencies have the authority to set more restrictive standards, so also refer to their guidance. If so, this information would likely be listed in the award letter.
Documentation
When USDA issued these funds, they told states they should be reviewing this as part of the Administrative Review process.
In order to pass your AR, you need to keep documentation that shows:
- The items purchased were domestic
- The items purchased were unprocessed or minimally processed
- The amount spent on allowable items was equal to the amount received
Domestic
You’re already keeping this documentation because of the Buy American Provision requirement.
Just be sure to remember not to include any non-domestic items in your total.
Unprocessed/Minimally Processed
You probably already have proof of this as well, in the form of product information sheets.
In most cases, the description on the invoice will be sufficient for an auditor, but be prepared to show a product information sheet if asked. Sometimes those invoice descriptions are hard to decipher!
The Amount Spend = Amount Received
This is where you’ll need invoices to back up your purchases. In addition to the invoices, you’ll want to use reports or a spreadsheet to come up with a total.
The best option is to run a report that will give you the total amount spent on allowable purchases. This report could come from the vendor (usage/velocity report), your financial software (vendor paid amount), or your ordering software, if using (purchasing data).
Some suggested strategies:
Check if any of your contracts exclusively contain allowable items. For example, our milk contract only contains domestic, minimally processed items. We can easily run reports showing how much we paid our milk vendor.
We will still keep the invoices on file as backup, but with 2,400 milk invoices in a year, running the report is much easier to get a total. Another vendor that will likely to fall in this category is your farm-to-school vendors!
Ask your vendor if they can assist. Many vendors can run reports for a specific timeframe showing what you purchased, how much of each, and the total amount spent on each.
In this case, let them know what data you need and that you prefer Excel, if possible. Then, go through each line item and mark which ones are allowable for SCA funds. Finally, total the allowable ones.
Utilize your BOH software. If you use a software program for ordering, you may be able to generate a report with the information needed.
Either follow the steps as outlined above for a vendor report OR add an “SCA Eligible” tag to allowable items and generate a report of what you received of those SCA Eligible tagged items.
Hand calculate. As a last resort, you can manually total your purchases. I recommend trying to find items you spend a lot of money on to minimize how many items you need to search for.
A Few Other Caveats
Here are a few more things to keep in mind when running your totals.
You cannot count anything prior to receiving the SCA funds. If you received the funds mid-year, you’ll need to run your reports beginning the date you received the funds.
You can count delivery/shipping fees. If you typically pay these costs in order to purchase SCA eligible items, then you can count them. A good example would be if a local farmer charges a delivery fee on top of the cost of the local produce. Both the cost of the produce and the delivery fee can be counted in your SCA total.
You cannot count labor or supplies. For example, you can’t count the labor it takes to chop a domestic watermelon or the plastic container you portion it in.
You can count eligible items served in SSO, but you cannot count items served in SFSP. These are NSLP/SBP funds. As such, SSO technically falls under NSLP, but SFSP does not.
You can count eligible items served in the NSLP Afterschool Snack Program. If you serve snack through NSLP (not CACFP), then you can count those items.
You cannot count FFVP costs. Since you are reimbursed for the cost of the produce in this program, you can’t apply the supply chain assistance funds to that produce too. That would be double-dipping.
Find more Q&A from the USDA here.
Summary
Each district that receives Supply Chain Assistance Funds will be required to show documentation that purchases were allowable and were equal to the amount received.
How have you been documenting your SCA fund purchases? Tell me in the comments below!
