Adult Meals Pricing in the NSLP and SBP Professional Standards: 3350 Pricing Division of School and Community Nutrition Kentucky Department of Education March 2017

Objectives By the end of this presentation, you will: Have a clear understanding of how to calculate an adult meal in the Child Nutrition Program. Have a clear understanding of what components are included in the formula to determine the adult meal price. Know how to determine what is your district’s reimbursement rate and where to find it.

Adult Meals Pricing in the NSLP & SBP Neither the USDA nor KDE SCN set specific prices for school lunch, breakfast, special milk or a la carte items. The local school district is responsible for setting prices and increasing prices as needed. Adult meal prices must be sufficient to cover overall cost of the meal, including the value of any commodities and federal bonuses used to prepare the meal. Schools that operate the NSLP and SBP are encouraged to sell meals to adults to model healthy eating to students.

Guidelines Student meals prices and adult meals prices should not be the same price. Adult meals must be priced higher than student meals to include the value of commodity products and offset the student reimbursement. Adult meal prices must be set at a price sufficient to cover all costs. SCN does not cap prices for adult meals. Any time student prices are increased, it would be appropriate to increase adult prices accordingly. Adult meal prices are reported annually during program renewal and included on the site application in CNIPS. Adult meals cannot be subsidized by federal funds.

Requirements Adult meal prices must be set at a price sufficient to cover the overall cost of the meal, including the value of any USDA Foods used in the production of the adult meals. Price should be set to cover the cost of: Food Labor Value of USDA Foods Utilities Indirect Costs Federal funds, student payments, and other nonprofit food service revenues cannot be used to support the costs of adult meals. Adult meals may not be claimed for reimbursement. If part or all of adult meals are included as part of staff benefits, revenue from a non-federal source must be used to cover the cost of the meal (teachers/program staff). If meals for adult staff who are directly involved in the operation and administration of the school nutrition program are provided, the cost may be supported by the non-profit school food service operation (food service staff).

Pricing Versus Non-Pricing Sites There is a different formula used to calculate adult meal prices for pricing and non-pricing sites. Non-pricing sites would be sponsors who participate in CEP, as well as RCCIs. Non-pricing sites do not charge students for meals. (FNS 782-5 Rev. 1)

Adult Meal Pricing Formula for Pricing Sites Paid meal price + 6 cent certification + severe need differential (breakfast) OR safety net (lunch) + commodity factor = price for adult meal (FNS 782-5 Rev. 1) If the components in the formula are not applicable to your district, such as severe needs differential, then do not add that amount towards the final price of an adult meal.

Adult Meal Pricing Formula for Non-Pricing Sites Free meal reimbursement + 6 cent certification + severe need differential (breakfast) OR safety net (lunch) + commodity factor = price for adult meal (FNS 782-5 Rev. 1) If the components in the formula are not applicable to your district, such as severe needs differential, then do not add that amount towards the final price of an adult meal.

Formula Components Reimbursement 6 Cent Certification Severe Need Differential or Safety Net Commodity factor

USDA School Meal Programs Reimbursement

CNIPS- District Specific Reimbursement Rates Reimbursement rates specific to your district are found in CNIPS under “Claims” section. The student paid meal prices are reported in your site applications found in CNIPS. New reimbursement rates are typically released each summer.

6 Cent Certification The HHFKA provides an additional 6-cents per lunch reimbursement to school districts that certified to be in compliance with the new meal patterns. Six Cent Certification is only for lunch and is not included for breakfast. Districts that receive the 6₵ certification must factor that amount into their adult meal price for lunches.

Severe Needs Differential (Breakfast) or Safety Net (Lunch) Safety Net for Lunch: SFAs in which 60% or more of the lunches served in the second preceding school year were served at free or reduced price receive the safety net funding for lunch. The federal reimbursement as of SY 17-18 is 2₵ for each lunch served. This higher payment rate is referred to as safety net. Severe Needs Differential for Breakfast: SFAs in which 40% or more of the lunches served in the second preceding school year were served at free or reduced price receive the severe needs differential for breakfast. The federal reimbursement for SY17-18 is 33₵ for each breakfast served. This higher payment rate is referred to as the severe needs differential. Districts that receive the severe needs differential or safety net must factor that amount into their adult meal price.

USDA Commodity Factor The value of commodities (or cash in lieu of commodities) is $0.23 for the period of 07/01/16 through 06/30/17. Institutions receive this as additional assistance for each lunch served. The commodity factor is adjusted annual based on the Price Index for Foods Used in Schools and Institutions. See the Federal Register here. Districts that receive USDA commodities must factor that amount into their adult meal price.

Example: Breakfast for Pricing Sites Paid meal price: $1.50 Federal Severe Need Differential (Breakfast): $0.33 Cash-in-lieu Rate for Commodities Received: $0.23 =Minimum Required Adult Breakfast Price: $2.12 Rounding up to the nearest cent is recommended.

Example: Lunch for Pricing Sites Paid meal price: $2.86 Federal $0.06 Certification: $0.06 Safety Net (lunch): $0.02 Cash-in-lieu Rate for Commodities Received: $0.23 = Minimum Required Adult Lunch Price: $3.17 Rounding up to the nearest cent is recommended.

Example: Breakfast for Non-Pricing Sites Free meal Reimbursement: $1.71 Federal Severe Need Differential (Breakfast): $0.33 Cash-in-lieu Rate for Commodities Received: $0.23 =Minimum Required Adult Breakfast Price: $2.27 Rounding up to the nearest cent is recommended.

Example: Lunch for Non-Pricing Sites Free meal Reimbursement: $3.16 Federal $0.06 Certification: $0.06 Safety Net(lunch): $0.02 Cash-in-lieu Rate for Commodities Received: $0.23 = Minimum Required Adult Lunch Price: $3.47 Rounding up to the nearest cent is recommended.

Adult Meal Price Overview It is imperative that adult meal prices are set high enough to cover all food, labor, and supply costs. Utilizing the Adult Meal Price Formula will ensure that districts are charging enough for meals.

Resources and Questions Please visit the SCN website for any additional resources. Please contact your SCN approving consultant for any additional questions. Thank you!