National School Lunch Program

National School Lunch Program

July 23, 2020 | Financial Management

The National School Lunch Program (NSLP) is an extensive, federally assisted meal program meant to provide nutritionally balanced meals to school children of need throughout the nation. In FY 2019, schools served over 4.8 billion lunches to children nationwide. The NSLP fed more than 30 million students. At the federal level, the program is administered by The Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA). At the state level, the program is administered by State agencies, which operate the program through agreements with school food authorities. The program can be overwhelming to start, monitor and meet compliance, but does benefit the children on your campuses. We have compiled some helpful information for you to consider as you begin or continue to maintain your current school lunch program.

The 10% Rule

Charter schools may participate in the NSLP as public schools. Participating schools receive cash subsidies and USDA foods for each reimbursable meal they serve. Lunches must meet federal meal pattern requirements and must be offered at a free or reduced price to eligible children. As your students register for your charter school this year, please be mindful of the school meal provision in Texas Education Code, Subchapter Z, Section 33.901. The code states that if at least 10% of students enrolled in an open-enrollment charter school are eligible for free or reduced-price breakfasts under the national school breakfast program provided for by the Child Nutrition Act of 1966, then the governing body of the open-enrollment charter school shall either:

  1. Participate in the national program and make the benefits of the national program available to all eligible students in the schools or school; or
  2. Develop and implement a locally-funded program to provide free meals, including breakfast and lunch, to each student eligible for free meals under federal law and reduced-price meals, including breakfast and lunch, to each student eligible for reduced-price meals under federal law, provided that the reduced price may not exceed the maximum allowable rate under federal law.

Either program chosen must be board approved and in place by the time that classes start.

Community Eligibility Provision

Some schools participating in the school lunch program are burdened with the administrative work involved in verifying whether students are eligible for the program. The Community Eligibility Provision (CEP) of the Healthy, Hunger-Free Kids Act of 2010 allows schools to use direct certification as a means of verification to alleviate the administrative process. CEP allows schools to serve breakfast and lunch at no cost to all enrolled students without collecting household applications. Instead, schools that adopt CEP are reimbursed using a formula based on the percentage of students categorically eligible for free meals based on their participation in other specific means-tested programs, such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). If the child qualifies as direct certified, the household is not required to submit a lunch application. Children may also be determined “categorically eligible” for free meals based on their status as a homeless, migrant, runaway, or foster child.

The USDA has also determined that schools participating in an early childhood or pre-kindergarten program that is funded by the state of Texas are considered CEP eligible because of the requirements to enroll in state funded early education programs. If your campus has plans to apply for CEP status, you must inform the Region Service Center so they can perform a verification process to determine the campus’ eligibility. The NSLP application is due by June 30, but the Region Service Center can begin the verification process toward the end of the school’s academic year.

Information to determine campus eligibility includes:

  • List of all the direct certified students
  • DOB’s
  • Site ID
  • The program for which the student is eligible. (If a student is eligible for multiple programs, only one is necessary to report. Choose by hierarchy, for instance: SNAP, TANF, Medicaid Free, and so on.)

Keep all the verification information the Region Service Center provides as this information will likely be requested by the auditors at the end of the year.

To help determine the potential savings of enrolling in the CEP program, has a calculation worksheet available. Download the CEP calculation worksheet here.

The Reality of Food Cost

Considering rising food costs and the increased cost of producing school meals to meet updated nutrition standards, school nutrition professionals face a delicate balancing act to keep their programs in the black. In April 2019, USDA released the School Nutrition and Meal cost study, which examined the cost of producing school meals during school year 2014-15. The study found that the average school meal program operates at a small deficit, and the reported cost of producing school meals typically exceeds federal reimbursements for those meals. While cost differ from one community to the next, the average lunch cost a campus $3.81, compared to the average federal free lunch subsidy of $3.32. The mean subsidy included $3.05 in USDA reimbursements and $0.27 worth of USDA foods. The payments and rates decided on are in effect from July 1 through June 30 every year. To boost operational revenue, many school meal programs rely on a la carte sales, provide catering services or contract with community programs such as Head Start to supply meals.

CNP Annual Financial Report

If your charter school participates in the NSLP, you are required to submit the school’s lunch program data to ensure compliance with the program’s guidelines. The Child Nutrition Program (CNP) financial audit consists of reporting all expenses, revenue and meals associated with the program. Information for the prior year is used to compare spending and meals.

Preparing and reporting the data can be tedious and time consuming. CSS will track this for our clients and submit the annual audit due April 1st, on your behalf.