Understanding USDA’s Special Milk Program for Schools Alaska Department of Education Child Nutrition ProgramS

The Special Milk Program (SMP) Started in 1955 Children may buy or receive free milk Participating sponsors receive reimbursement from the USDA The Special Milk Program started in 1955 with the purpose of providing milk to children in schools and child care institutions devoted to the care and training of children, that do not participate in other Federal child nutrition programs. The program reimburses sponsors for the milk they serve.

How It Works Participating sponsors: Operate on a non-profit basis Federal reimbursement used to reduce the sale price of milk to all children Sponsors wishing to participate in the Special Milk program must operate on a non-profit basis. Federal reimbursements must be maximized to reduce the “price per ½ pint” which children would normally pay for milk.

School Participation Requirements Must be a public or nonprofit private school Participating students cannot have access to the National School Lunch or School Breakfast programs Schools who do not participate in other school meals programs may claim all milk consumed by children under the SMP In order to be eligible to participate in the Special Milk Program, schools must first meet these criteria: They must be recognized as a public or nonprofit private school And participating students cannot have access to school breakfast or lunch programs. The critical word there being “Access.” For example: If a child comes for a half day and gets there in time to participate in the school breakfast program, that child is then not eligible for participation in the Special Milk Program ((add example of a positive – ie. Juneau preschool))) Schools who do not participate in other school meals programs may claim all milk consumed by children under the SMP, including milk served at lunch and during milk breaks throughout the school day

SMP Options Pricing Plan Pricing Plan with Free Milk Option Option 1 Non-Pricing Plan Option 1 Pricing Plan Option 2 Pricing Plan with Free Milk Option Option 3 When schools sign up to participate in the Special Milk Program they must choose from different pricing options including a non-pricing plan, a pricing plan, and a pricing plan with a free milk option for needy students. Next we will review the different pricing options…

Option 1: Non-Pricing Plan Children are not charged for milk Reimbursement is based on current year’s federal reimbursement rate Under the non-pricing plan, children are not charged for milk. Reimbursement is based on current year’s federal reimbursement rate. Currently $0.2075.

Option 2: Pricing Plan Pricing formula as follows: Milk is sold to all children Pricing formula as follows: Milk Cost $0.2700 (per ½ pint) Admin/supply + $0.0500 Program cost $0.3200 Less reimbursement - $0 .2075 Student cost for milk $0.1025 (round up to nearest nickel) Note: At no point shall the Federal reimbursement exceed the cost to the school for milk served to children Under the pricing plan, milk is sold to all children with the reimbursement utilized to keep the cost to students low The ½ pint price should reflect the difference between federal reimbursements and the cost to operate the program For example… The reimbursement rate for the 2017-2018 school year is .2075 per half pint. If the dairy cost for your school is .27 cents per ½ pint and administrative and supply costs to operate the SMP are .05 cents per half pint, the cost to children for milk should be approximately .1025 cents per ½ pint of milk which could be rounded up to .11 cents (or the nearest nickel). Schools are allowed to count administrative and supply costs including costs such as straws and secretarial time used to compile and submit the special milk claim when determining the operating costs of the program. At no event shall the federal reimbursement rate exceed the cost to the school for milk served to children!

Option 3: Pricing Plan with the Free Milk Option Schools charge students: no charge for “free eligible” students may/may not charge for “paid eligible” Claim for Reimbursement: actual milk cost for “free eligible” students Federal reimbursement for “paid eligible” students Under Option 3… Schools determine eligibility based on income thru household applications and direct certification lists. CEP percentages are not applicable. Schools provide milk at no charge to students who qualify for free milk benefits Schools have the option to charge students in the paid category - following the formula from Option 2 - or provide milk at no-charge to all students. Schools are reimbursed at the paid reimbursement rate for children in the “paid” category and at the actual milk cost for children in the “free” category

Option 3: Actual Cost How to determine Actual Cost per ½ pint: ½ pint – divide invoice amount by # of ½ pints Gallon – divide price paid for each gallon by 16 Commodity – USDA per-case value Actual cost is determined by calculating what each ½ pint of milk costs the school after all expenses are factored in. For example: If 1 gallon of milk cost $6.50 (including any additional expenses) and there are 16 ½-pints of milk per gallon – the actual cost would be ~ $0.41. To determine the price per ½ pint for Commodity milk – use the USDA per case value (including the administrative fees and any shipping charges) divided by the # of ½ pints per case.

Option 3: Public Release Submitted yearly Community publication Not required to pay Community Areas Libraries Food pantries WIC offices Schools offering free milk to eligible students under Option 3 must submit an annual public release to a community publication stating that milk is available to all children in attendance without regard to race, color, or national origin. Schools are not required to pay to have it published. Schools are encouraged to submit the public release to community bulletin boards such as: libraries, food pantries, post offices, WIC offices, and grocery stores.

Option 3: Benefit Issuance Document (BID) BID must include: student name eligibility status (Paid or FREE) approval method application – if charging “paid” students direct eligible category Notify household of eligibility and any change in benefits during the program year A benefit issuance document must be kept for all eligible students indicating their eligibility status for the special milk program. The BID must be kept current and households notified if there is a change in eligibility status.

Option 3: Protection From Overt Identification Payment collection process Record of daily milk consumption by name Protection from overt identification Schools must take necessary steps to protect participating students from overtly being identified, so that children who are receiving free milk benefits are not singled out in any way over children who pay for their milk. Checklists used at the point of service to record milk consumption, by student name, must also be void of a students eligibility status.

Permanent Agreement On file with the Department of Education – Child Nutrition Programs Covers all Federal food programs All sponsors receiving federal reimbursement for Child Nutrition programs must have a signed Permanent Agreement form on file prior to operating the SMP. A Permanent agreement need only be submitted once and covers all federal food programs.

Special Needs in SMP Children with Milk Related Disability or Medical Condition: Medical Statement on file Substitute according to medical statement https://education.alaska.gov/cnp/specneeds Special Needs in SMP- If a child has a disability or medical condition that requires a “milk modification,” the school must a have medical statement on file from a recognized medical authority and is required to provide a substitute according to the medical statement. The school does not have a choice about accommodating – they must provide a substitution.

Civil Rights “And Justice for All” poster must be displayed in public area near milk service areas Non-discrimination statement including complaint filing information must appear on all materials related to the SMP “And Justice For All” posters are available from the State Agency and need to be posted near the milk cooler or near the milk serving area in all schools participating in the Special Milk Program. The poster must be placed in a location that is easily visible to all students as it provides information about who to contact if a student feels they have been discriminated against when participating in any child nutrition program under USDA.

Recordkeeping Requirements Milk Counts - Point of Service (POS) Financial Accountability Claim backup Purchasing/Procurement Temperature logs Schools participating in the Special Milk Program are required to keep the following items on file for 3 years plus the current year:

Milk Counts Point of Service (POS) Documented at the point of service: Option 1 & 2 - track by # of milks served Option 3 – track by student name Milk Counts may NOT be based on: milk invoices paid milk receipts cooler count attendance lists Point of Service (POS) Milks must be counted and documented at the time the student receives it. The point of service count may include more than one milk per student, but it may not include adult milks or milks used for cooking, class projects, or other areas where milk may be used throughout the school day. It is only for milk consumed by children during the school day. For Options 1 and 2: milk counts can be recorded on a calendar or milk count sheet. Milk counts may NOT be based on dairy invoices, paid milk receipts, cooler counts or daily attendance lists. For Option 3: milk counts are recorded by student name, using an electronic counting system or class roster which can be used to track consumption by eligibility category.

Financial Accountability Funds used to support SMP Fund balance cannot exceed 3 months operating costs Separate line or ledger item in bookkeeping system Excess funds may not be transferred to general fund Financial Accountability All federal reimbursement and funds received from students paying to participate must be used to support the Special Milk Program The balance of the non-profit fund account cannot exceed 3 months operating expenses The SMP funds must be shown as a separate line item in the school’s financial bookkeeping system Any excess funds must stay in the SMP account and may not be transferred to the general fund

Monthly Claims Submitted in CNP Web Within 60 calendar days Monthly claims are submitted through the CNP Web under the School Nutrition Program puzzle piece. Claims must be submitted within 60 calendar days from the last day of the claim month Schools must maintain milk count sheets and/or student roster sheets to back up their monthly claims

Procurement Requirements Micro Purchasing: < $3,500 Quotes not required, distribute purchase equitably Informal Procurement: $3,500-$150,000 Quotes required, documentation required Formal Procurement: > $150,000.00 Formal announcement required, documentation required Micro Purchasing is for purchases under the $3,500 threshold. Quotes are not required for micro purchases but it is recommended that schools distribute their purchases equitably between local vendors. For Informal and Formal Procurements: Schools must practice what is known as “free and open competition.” This means that schools must get price bids from at least three milk vendors that meet the school’s specifications for milk and then award the bid to the vendor with the lowest price point. Always remember the “Three Bids and a Buy” rule when looking to purchase milk or equipment for the program. All attempts at procuring price quotes and bids must be documented. Schools may apply a geographic preference when procuring milk.

Milk Safety Stored in a sanitary and temperature safe environment Daily temperature log Sanitation Schools must provide a milk storage facility that ensures that milk is kept in a sanitary and temperature safe environment. Temperatures must be taken and logged daily for all milk coolers.

Questions? Debbie Soto Alaska Dept. of Education & Early Development Child Nutrition Program (907) 465-8712 If you have additional questions regarding the Special Milk Progr.am contact the Child Nutrition Program staff at 907-465-8712.