Report: Paperwork Reduction in the School Nutrition Programs


      PAPERWORK REDUCTION IN THE SCHOOL NUTRITION PROGRAMS


                     1996 REPORT TO CONGRESS



             UNITED STATES DEPARTMENT OF AGRICULTURE
                    Food and Consumer Service


INTRODUCTION


The Food and Consumer Service (FCS) of the U. S. 
Department of Agriculture (USDA) administers the 
National School Lunch Program (NSLP) and the School 
Breakfast Program (SBP).  These programs, authorized by 
the National School Lunch Act and the Child Nutrition 
Act of 1966, are designed to ensure that schoolchildren 
are offered a nutritious and well-balanced breakfast 
and lunch each school day. 

State and local administrators of the NSLP and the SBP 
have expressed concern with the volume of paperwork 
associated with managing these programs.  Accordingly, 
section 106(c) of Public Law 103-448, the Healthy Meals 
for Healthy Americans Act of 1994 required the 
Department to report to Congress on the progress of its 
paperwork reduction activities.  Specifically, the 
Department must: 


 *   Justify the need for production records required 
     under 7 CFR 210.10(b) and; 

 *   Describe how it has reduced paperwork relating to 
     the school lunch and school breakfast programs.


In response to this mandate, this report is divided 
into two chapters.  Chapter I, Production Records, 
provides an overview of the production record 
requirement, including the contribution production 
records make to an efficient food service operation and 
its ability to meet the Dietary Guidelines for 
Americans and other nutrition standards.

Chapter II, Paperwork Reduction Activities, describes 
the Department's recent efforts to reduce the paperwork 
burden on State and local cooperators, including the 
paperwork reduction activities resulting from section 
108 of Public Law 101-147, the Child Nutrition and WIC 
Reauthorization Act of 1989.


CHAPTER I:    PRODUCTION RECORDS


The service of good food and the maintenance of cost 
controls are the foundation of any successful meal 
service enterprise, be it commercial or nonprofit.  To 
consistently produce meals that are wholesome and 
nutritious, taste good and that are within cost 
parameters requires more than a good cook's memory.  

Successful food service managers maintain careful 
records of the quantities and types of foods used in 
each day's meals.  These "production records" are 
fundamental business records which enable a food 
service operation to forecast future needs and control 
food costs by taking into consideration the potential 
number of customers on any given day; customer likes 
and dislikes as established through historical 
information on consumption patterns, leftovers and food 
waste; the amount of food needed; and the cost of that 
food. 

School food services have maintained daily "production" 
records since 1976, following enactment of Public Law 
94-105.  The law required the Secretary to establish 
procedures to diminish the waste of foods served in the 
lunch program without endangering the nutritional 
integrity of those lunches.  

There is no required format for production records.  
They may be very simple or very detailed.  However, the 
information included in a production record is 
determined, in large part, by the goals of the food 
service operation.  


    * Contents of School Food Service Production Records *


While the goals of a commercial enterprise may focus on 
an increased customer base and cost control, the goals 
of school food service are somewhat broader.

The NSLP and the SBP are designed to ensure that 
schoolchildren are offered a nutritious and well-
balanced breakfast and lunch each school day.  As a 
result, school food service operations:

 *   Offer meals that meet the minimum nutritional 
     requirements and that are consistent with the 
     Dietary Guidelines,

 *   Offer meals that are appealing to children,

 *   Educate children to make food choices that lead to 
     a nutritious diet and improved health, and

 *   Provide nutritious meals within the available 
     resources. 
          

To assist in meeting these goals, school food service 
production records generally include: the menu item 
used and its form; the recipe or product; the age/grade 
group being served; the portion size; the projected 
servings; the amount of food used; the number of 
participant, a la carte and adult servings; any 
leftovers and substitutions; and the person 
responsible.


                 * Uses of Production Records *


The information contained in a school food service 
production record is essential for planning, 
particularly in an offer versus serve environment; 
establishing that meals meet the reimbursable meal 
requirements and nutritional standards set forth in 
program regulations; and for financial planning to 
ensure that ordering and purchasing activities are 
consistent with consumption patterns.  Additionally, 
State agencies use production records to determine 
whether meals meet program requirements and to offer 
suggestions for improvements to the meal service.
          
Planning the Meal Service - Forecasting how much food 
to prepare when several choices are available, or when 
the number to be served fluctuates, is a difficult 
task. Good production records of how many portions of 
each food item were served in the past provide 
historical information which enables the food service 
manager to make an "educated guess".

When offer versus serve is employed, students are 
allowed to turn down an established number of food 
items in the planned reimbursable meal if they do not 
intend to eat them.  When a student has declined a full 
portion of an item, schools may offer the student a 
smaller portion.  While offer versus serve can be an 
effective tool to reducing food waste, it de-stabilizes 
the menu planning process.  Production records enable 
the planner to evaluate past consumption patterns and 
make a reasonable estimate of the quantities of foods 
to prepare. 

Nutritional Integrity - In order to claim 
reimbursement, schools must offer meals which meet the 
requirements specified in program regulations.  
Production records provide the planner with an 
opportunity to evaluate each menu and compare the 
number of food items and quantities planned to ensure 
that the meal is indeed reimbursable.  Analysis of each 
week's meals using the school's menus and supporting 
production records also offers the planner the 
opportunity to ensure that the menus planned meet the 
established nutrition standards, including the Dietary 
Guidelines.
     
Financial Management - Production records also assist 
food service operations with their facility's financial 
management, by providing specific consumption 
information that can guide in food ordering and 
purchasing activities.  Complete and accurate records 
are among the basic requirements for the control of 
costs.  A food service operation, no matter how small 
or how large, cannot exist without the information that 
production records provide to guide present operations 
and as a basis for future financial planning.

Program Integrity - The production record is a record 
of amounts of foods to be prepared, the resulting 
quantities of cooked foods available to be served, and 
the actual number of servings obtained from a given 
amount of food.  Together with a list of quantities 
left over, this record provides specific information on 
which to base forecasting.  The more closely the food 
service manager can predict the number of each item 
that will be selected and control the number of 
portions obtained from given quantities of prepared 
food, the more likely the food service will be able to 
provide one reimbursable lunch/breakfast per child per 
day.
                         
Program Evaluation - As a monitoring tool, production 
records enable State agencies to ensure that meals meet 
the nutritional requirements established by Congress.  
Production records also provide the Department and 
State agencies with an opportunity to make 
recommendations for improvements to the meal which will 
make the meal more appealing to students and more cost 
effective. 


                         * Conclusion *


Production records are valuable management tools which 
assist school food service managers in serving high 
quality foods while controlling costs.  Ultimately, 
production records are the key to providing the 
Nation's schoolchildren with the nutritious and well-
balanced meals intended by Congress.
 

CHAPTER II:    PAPERWORK REDUCTION ACTIVITIES


                         * Background *


In response to concerns expressed by State and local 
administrators concerning the volume of paperwork 
associated with the programs authorized under the 
National School Lunch Act or the Child Nutrition Act of 
1966, Congress mandated paperwork reduction activities. 
Section 108 of Public Law 101-147, the Child Nutrition 
and WIC Reauthorization Act of 1989, required the 
Secretary to reduce the paperwork of State and local 
educational agencies, schools, and other agencies 
participating in the programs authorized under these 
Acts as much as possible.

The Department was directed to convene at least one 
meeting with State and local administrators of programs 
authorized under the Acts, obtain suggestions from 
members of the public with respect to reduction of 
paperwork and report to Congress on the extent to which 
a reduction has occurred in paperwork.

In response to this mandate, on April 9, 1990, a Notice 
was published in the Federal Register soliciting 
comments and suggestions from program administrators 
and the general public with respect to the reduction of 
paperwork.  The comment period, which closed June 8, 
1990, resulted in 593 responses from schools, adult and 
child care providers, school districts, State agencies, 
and special interest groups. 

A task force of Child Nutrition Program administrators 
was convened to discuss possibilities and options to 
reduce the paperwork burden and to assess the 
suggestions recommended by the commenters.  The task 
force met July 30 through August 3, 1990 and included 
representatives of the Legislative Committee of the 
American School Food Service Association, Program 
Directors at the regional, State and local levels, and 
local program administrators from the Child and Adult 
Care Food Program and the Summer Food Service Program.

As a result of the paperwork reduction activities 
mandated by Public Law 101-147 and the recommendations 
of the task force, there were a number of paperwork 
reductions affecting the NSLP and SBP, the most 
significant included:


 *   Establishing permanent State-local agreements for 
     carrying out the NSLP and the SBP;

 *   Allowing districts to certify a child as eligible 
     for free meals, without further application, by 
     directly communicating with the appropriate State 
     or local agency to obtain documentation that the 
     child is a member of a household currently 
     certified to receive benefits under the Food Stamp 
     Program or the Aid to Families with Dependent 
     Children Program (AFDC);

 *   Implementing pilot projects to test alternative 
     application and meal counting methods; and

 *   Raising the claims disregard threshold.


In 1990 the Department submitted a report to Congress 
regarding the status of its paperwork reduction 
activities.  The report, Paperwork Reduction in the 
Special Nutrition Programs, outlined the Department's 
efforts to solicit and implement suggestions from 
program administrators and the general public with 
respect to the reduction of paperwork.

Since that time, the Department has further reduced the 
paperwork burden of the NSLP and the SBP.  Some of 
those reductions were required as a result of 
legislative action, other reductions were Departmental 
initiatives.  The most significant reductions in 
paperwork affecting the NSLP and SBP include:


 *   Extending the Coordinated Review Effort review 
     cycle from 4 to 5 years;

 *   Allowing districts to establish their own internal 
     control procedures to ensure the accuracy of the 
     meal count system;

 *   Eliminating the requirement to retain distinct 
     records of the nonprofitability of the school food 
     service account;

 *   Allowing income eligible Head Start participants 
     to be considered automatically eligible for the 
     lunch and breakfast program; and

 *   Expanding the alternative certification and meal 
     counting, commonly termed "Provisions 2 and 3".


The Department has also undertaken several paperwork 
reduction activities relating to the provision of 
commodities in the lunch and breakfast program.  These 
efforts include:


 *   Evaluating the effectiveness of FCS forms in 
     tracking commodities and reporting inventories;

 *   Clarifying and simplifying the procedure for 
     reporting commodity complaints;

 *   Allowing longer contracts between State agencies 
     and warehouses; and

 *   Collecting commodity acceptability reports less 
     frequently.


This chapter provides a brief summary of the status of 
the more significant paperwork reduction activities 
identified in the 1990 report as well as more recent 
efforts to reduce paperwork in the NSLP and the SBP. 
The status of each activity is identified below.
 

       * Establishing permanent State-local agreements 
                    for the NSLP and the SBP *


Prior to Public Law 101-147, school food authorities 
entered into a written agreement with the State agency 
each year to administer the School Nutrition Programs 
in schools under their jurisdiction.  Public Law 101-
147 eliminated this requirement and established the 
agreement as a permanent document.

In May, 1992, the Department issued guidance to make 
the State-local agreements for school nutrition 
programs permanent.  The Department took this 
opportunity to also make most of the free and reduced 
price policy statement permanent.

The Department expects to reduce its Information 
Collection Budget by approximately 22,000 hours per 
year. 


   *  Allowing districts to certify a child as eligible for 
      free meals, without further application, by directly 
      communicating with the appropriate State or local 
     agency to obtain documentation that a the child is a 
      member of a household currently certified to receive 
                    food stamp/AFDC benefits *


Public Law 101-147 allows a school food authority to 
certify children as eligible for free, without further 
application, by directly communicating with the 
appropriate State or local agency to obtain 
documentation that the children are members of 
households currently receiving food stamps or are part 
of assistance units currently receiving AFDC 
assistance. This provision is commonly termed "direct 
certification".

The Department issued guidance implementing direct 
certification in April, 1991.  Direct certification may 
be implemented in a variety of ways.  Additionally, 
school officials are not required to verify household's 
certified through direct certification.  The Department 
is currently conducting a study to determine the number 
of States in which direct certification is being used 
and to assess the most efficient and cost effective 
direct certification procedures for urban schools, 
rural areas, etc.

The Department expects to reduce its Information 
Collection Budget by over 200,000 hours annually.


      * Implementing pilot projects to test alternative 
             application and meal counting methods *


Public Law 101-147 required the Department to carry out 
pilot projects to test alternatives to annual 
application and daily meal counting procedures in the 
NSLP.  FCS chose 12 sites to participate in the pilot 
project.  The pilot sites tested procedures such as: 
serving universal free lunches in high need areas, 
collecting applications every 3 years, and developing 
alternate counting and claiming procedures for 
reimbursement.

The Department has evaluated the effectiveness of these 
pilot projects and will be issuing a report of its 
findings in the near future.


           * Raising the claims disregard threshold *


Prior to 1992, State agencies, FCS and the Office of 
Inspector General (OIG) were permitted to disregard any 
overpayment which did not exceed $100 or the amount 
established under State law, regulations or procedures. 
No claim could be disregarded in a current fiscal year 
or where there was substantial evidence of violation of 
criminal law or civil fraud statutes.

The paperwork reduction task force recommended raising 
the claim disregard threshold to $500 and also allowing 
current fiscal year claims to be disregarded if they 
are less than $500.

In 1991 and 1992, the Department issued two rules (56 
FR 32920 and 57 FR 38579) which made adjustments to 
Section 210.19 which resulted in providing State agencies, 
FCS, and OIG the authority to disregard any overpayment 
if the total does not exceed $600 in any fiscal year.


    * Extending the Coordinated Review Effort review cycle 
                       from 4 to 5 years *


Prior to June, 1995, §210.18 of the NSLP regulations 
required State agencies to conduct administrative 
reviews of all school food authorities participating in 
the lunch program at least once during each 4-year 
review cycle.

On June 13, 1995 (60 FR 31188), the Department issued a 
final rule which extended the Coordinated Review Effort 
review cycle to 5 years.
  
The Department expects that the reduction in the number 
of annual reviews will not compromise program 
accountability, but will enable State agencies to 
increase their commitment to training and technical 
assistance necessary to the efficient implementation of 
the School Meals Initiative.

This change is expected to result in a 20 percent 
decrease in State agency administrative burden.  As a 
result, State agencies will have the opportunity to 
provide additional training and technical assistance 
activities.

  * Allowing districts to establish their own internal meal 
     control procedures to ensure the accuracy of the meal 
                          count system *

Prior to June, 1995, each school food authority was 
required to perform a specific internal control review 
on each day's meal counts to ensure that schools were 
claiming reimbursement for only the number of free, 
reduced price and paid lunches served on any day of 
operation to children currently eligible for such 
lunches.

This internal control, termed "edit check", required 
the school food authority to compare each school's 
daily counts of free, reduced price and paid lunches 
against the number of children in that school currently 
eligible for free, reduced price and paid lunches, 
adjusted for attendance.
  
In a final rule issued June 13, 1995 (60 FR 31188), the 
Department eliminated the requirements for a specific 
daily edit check on meal counts for those school food 
authorities that have been found through Coordinated 
Reviews to have accurate meal counts and claims.  These 
school food authorities were provided the option of 
establishing their own systems of internal controls.  

The Department expects to reduce its Information 
Collection Budget by approximately 403,000 hours 
annually.


       * Eliminating the requirement to retain distinct 
          records of the nonprofitability of the school 
                      food service account *


Prior to June, 1995, school food authorities were 
required to maintain distinct records to document the 
nonprofit status of the school food service.

The Department determined that it was not necessary for 
the program regulations to mandate this recordkeeping 
requirement because these records (e.g., receipts, 
expenditures, etc.) are the accounts which any 
enterprise needs to maintain in the normal course of 
conducting business  These kinds of records are a 
necessary part of a school food authority's own 
accountability system and, in many cases, are required 
by State laws.

In a final rule issued June 13, 1995 (60 FR 31188), the 
Department removed the Federal requirement that 
distinct records be maintained to document the 
nonprofit status of the school food service.  

The Department expects this regulatory change will 
reduce the paperwork burden on schools because they 
will no longer need to maintain records using Federal 
specifications; records would be maintained in the 
manner preferred by the school district or required by 
State laws.  Accordingly, the Department expects to 
reduce its Information Collection Budget for the 
program by 12,716,291 hours annually.  

          
   * Allowing income eligible Head Start participants to be 
      considered automatically eligible for the lunch and 
                       breakfast program *


Public Law 103-448, enacted November 2, 1994, amended 
section 9(b)(6) of the NSLA to make children who are 
enrolled in the Head Start Program on the basis of Head 
Start's low-income criteria automatically eligible for 
free meal benefits in the NSLP and the SBP without 
further application or eligibility determination. 

On April 14, 1995, the Department issued guidance to 
expedite implementation of this provision which was 
effective on September 25, 1995.

While this provision will provide a significant 
paperwork reduction burden to affected households and 
Head Start Centers, the Department does not collect 
data on the numbers of households involved.  As a 
result, no estimates on burden reduction are available.


      * Expanding the alternative certification and meal 
                      counting provisions *


Public Law 103-448 modified the alternative counting 
and claiming provisions of the NSLP and SBP.  

One of these modifications extended the current 3-year 
cycle for "Provision 2" schools to 5 years and allowed 
subsequent 5 year cycles.  Under Provision 2, annual 
notification and certification of free and reduced 
price meals is reduced to once every 3 years if all 
children are served free meals.  Traditional meal 
counts are conducted in the first year and converted to 
monthly percentages.  In the second and third years, 
these monthly percentages are applied to total meal 
counts.

Another modification resulted in a new certification 
and meal counting procedure for schools serving meals 
free to all children for 4 years.  Under Provision 3, 
schools are not required to make annual free and 
reduced price eligibility determinations or take daily 
meal counts during the 4-year cycle.  Meal 
reimbursement and commodity assistance are provided at 
the same level as the school received in the last year 
free and reduced price applications were taken and 
daily meal counts by category were made, adjusted for 
inflation and enrollment.

In the Spring of 1995, the Department issued guidance 
informing the schools of these paperwork reduction 
provisions.  

The effect of this provision is not yet known.


   * Evaluating the effectiveness of FCS forms 155 and 155A 
        in tracking commodities and reporting inventories *


As a result of an extensive agency review of these 
forms, FCS completed a major revision of form FCS-155, 
a report designed to monitor inventories and the 
distribution of USDA commodities at the State level.  
FCS also eliminated form FCS-155A, which was a report 
of the receipt of commodity shipments, by delivery 
order.  

Full implementation of the Processed Commodities 
Inventory Management System allowed most of the 
information previously collected in the FCS-155 to be 
accessed electronically.  As a result, an alternate, 
less time-consuming inventory reporting form was 
developed, pilot-tested, and subsequently approved.  
The revised FCS-155--titled the Inventory Management 
Register--collects information on excess commodity 
inventories (those exceeding a six-month supply) only, 
and has reduced substantially the reporting burden for 
State distributing agencies.  While this form continues 
to be submitted monthly, a rule addressing paperwork 
reduction initiatives soon to enter formal clearance 
will propose to reduce the frequency of submission to 
semiannual.  

State distributing agencies continue to report receipts 
for foods delivered to the Kansas City Commodity 
Office, utilizing form KC-269A, the Distributing Agency 
Consignee Receipt; the now obsolete FCS-155A was 
essentially a duplication of this information 
collection. 


   * Clarifying and simplifying the procedure for reporting 
     commodity complaints, and increasing the effectiveness 
                        of the procedure *


In response to the paperwork reduction task force 
recommendation that the Department reduce the amount of 
information it must have before acting on a commodity 
complaint, FCS developed, and disseminated, a minimal 
list of data that must be provided prior to the agency 
taking any action regarding a commodity complaint. 

FCS also simplified the process of transmitting the 
data needed to act on commodity complaints by revising 
the Special Nutrition Programs Integrated Information 
System (SNPIIS) to allow FCS Regional Offices to submit 
complaint data electronically.  An informational 
booklet containing instructions as to how to input 
complaint data into the system was disseminated to all 
FCS Regional Offices. 

In order to streamline the process of reporting 
commodity complaints, FCS has set up a telephone "hot 
line", for use on a pilot basis.  Under the pilot 
project, selected States or recipient agencies within 
those States, and all Indian Tribal Organizations, 
report commodity complaints to FCS Headquarters 
directly, via a toll-free 800 number or facsimile 
machine.  If the pilot project, the initial phase of 
which will conclude on September 30, 1996, indicates 
that direct reporting of commodity complaints to the 
national office provides better service to the 
recipients utilizing USDA commodities, by reducing the 
amount of time required to resolve complaints, then 
access to the hot line will be extended to all States. 


          * Allowing longer contracts between State 
                     agencies and warehouses *


The proposed paperwork reduction rule referenced above 
will also address the issue of the duration of 
contracts between State and local agencies and storage 
facilities.  The rule will propose to extend the 
contract period from one year, with an option for two 
additional years, to up to five years.  States may 
choose to negotiate contracts for a five-year, or 
three-year, period, or for one year with additional 
option years not exceeding four, etc.  This flexibility 
will enable States to enter into contracts of whatever 
duration, up to a five-year maximum, and will yield the 
best combination of quality service and cost.  Such 
contracts would also be attractive to commercial 
warehouses, as they would not have to bid so frequently 
for a new contract.  Furthermore, longer contracts 
would provide more time to amortize expenses incurred 
in ensuring a high quality of service.  


             * Collecting commodity acceptability 
                     reports less frequently *


Subsequent to the 1990 meeting of the paperwork 
reduction task force, the Food, Agriculture, 
Conservation, and Trade Act of 1990 (Public Law 101-
624) amended the frequency of submission of commodity 
acceptability information from semiannual to annual.  
(While the task force recommended biennial submission, 
this would necessitate further legislative action.)

Form FCS-663, the Commodity Acceptability Report, was 
also revised last year to substantially decrease the 
paperwork burden for State and local agencies in 
reporting commodity acceptability information, while 
still providing valuable information on the commodity 
preferences of program recipients.  


                         * Conclusion *

In recent years, the Department has made a number of 
significant reductions in the paperwork burden for 
cooperating State and local agencies participating in 
the School Nutrition Programs.  


These efforts reflect the Department's long term 
commitment to reducing the paperwork requirements of 
the program without jeopardizing the need for program 
integrity.
 

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