PART 245—DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS AND FREE MILK IN SCHOOLS Authority: 42 U.S.C. 1752, 1758, 1759a, 1772, 1773, and 1779. § 245.1 General purpose and scope. (a) This part established the responsibilities of State agencies, Food and Nutrition Service Regional Offices, school food authorities or local educational agencies, as defined in § 245.2, as applicable in providing free and reduced price meals and free milk in the National School Lunch Program (7 CFR part 210), the School Breakfast Program (7 CFR part 220), the Special Milk Program for Children (7 CFR part 215), and commodity schools. Section 9 of the National School Lunch Act, as amended, and sections 3 and 4 of the Child Nutrition Act of 1966, as amended, require schools participating in any of the programs and commodity schools to make available, as applicable, free and reduced price lunches, breakfasts, and at the option of the School Food Authority for schools participating only in the Special Milk Program free milk to eligible children. (b) This part sets forth the responsibilities under these Acts of State agencies, the Food and Nutrition Service Regional Offices, school food authorities or local educational agencies, as applicable, with respect to the establishment of income guidelines, determination of eligibility of children for free and reduced price meals, and for free milk and assurance that there is no physical segregation of, or other discrimination against, or overt identification of children unable to pay the full price for meals or milk. (Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758)) [Amdt. 6, 39 FR 30337, Aug. 22, 1974, as amended by Amdt. 10, 41 FR 28783, July 13, 1976; 47 FR 31852, July 23, 1982; 72 FR 63792, Nov. 13, 2007] § 245.2 Definitions. Adult Categorically eligible Family SNAP, FDPIR TANF Foster child, Homeless child Migrant child Head Start child Runaway child Commodity school Current income Direct certification SNAP FDPIR TANF Foster child, Homeless child Migrant child, Head Start child Runaway child Disclosure Documentation (1) The completion of a free and reduced price school meal or free milk application which includes: (i) For households applying on the basis of income and household size, names of all household members; income received by each household member, identified by source of the income (such as earnings, wages, welfare, pensions, support payments, unemployment compensation, and social security and other cash income); the signature of an adult household member; and the last four digits of the social security number of the adult household member who signs the application or an indication that the adult does not possess a social security number; or (ii) For a child who is receiving assistance under SNAP, FDPIR TANF (2) In lieu of completion of the free and reduced price meal application: (i) Information obtained from the State or local agency responsible for administering SNAP, FDPIR TANF SNAP, FDPIR TANF (ii) A letter or other document provided to the household by the agency administering FDPIR TANF Foster child, Homeless child, Migrant child, Head Start child, Runaway child (iii) Information from the local educational agency, such as enrollment information or information from applications submitted for free or reduced price meals, or from SNAP, FDPIR or TANF program officials that indicate there are children in a Family, , (iv) Information obtained from an official responsible for determining if a child is a Foster child, Homeless child, Migrant child, Head Start child, Runaway child, (v) When a signature is impracticable to obtain, such as in a computer match, the local educational agency shall have a method to ensure that a responsible official can attest to the accuracy of the information provided. Family FDPIR FNS FNSRO where applicable Foster child et seq. Free meal Free milk Head Start child et seq. Homeless child Household Household application Income eligibility guidelines Local educational agency Meal Medicaid et seq. Migrant child Milk Nonprofit Operating day Reduced price meal Runaway child et seq. Service institution School, school food authority, SNAP et. seq. SNAP household SNAP. Special Assistance Certification and Reimbursement Alternatives State Children's Health Insurance Program (SCHIP) et seq. TANF Verification Documentation (Secs. 801, 803, 812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753, 1759(a), 1773, 1758)) Editorial Note: For Federal Register www.govinfo.gov. § 245.3 Eligibility standards and criteria. (a) Each State agency, or FNSRO where applicable, shall by July 1 of each year announce family-size income standards to be used by local educational agencies, as defined in § 245.2, under the jurisdiction of such State agency, or FNSRO where applicable, in making eligibility determinations for free or reduced price meals and for free milk. Such family size income standards for free and reduced price meals and for free milk shall be in accordance with Income Eligibility Guidelines published by the Department by notice in the Federal Register. (b) Each participating local educational agency and all participating schools under its jurisdiction must adhere to the eligibility criteria specified in this part. Local educational agencies must include these eligibility criteria in their policy statement as required under § 245.10 and it must be publicly announced in accordance with the provisions of § 245.5. Additionally, each State agency, or FNSRO where applicable, must require that local educational agencies accept as income eligible for free meals and free milk, children who are categorically eligible for those benefits based on documentation of eligibility, as specified in § 245.6 (b). (c) Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. When a child is not a member of a family (as defined in § 245.2), the child shall be considered a family of one. In any school which participates in more than one of the child nutrition programs, eligibility shall be applied uniformly so that eligible children receive the same benefits in each program. If a child transfers from one school to another school under the jurisdiction of the same School Food Authority, his eligibility for free or reduced price meals or for free milk, if previously established, shall be transferred to, and honored by, the receiving school if it participates in the National School Lunch Program, School Breakfast Program, Special Milk Program and the School Food Authority has elected to provide free milk, or is a commodity-only school. (Sec. 8, Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1758); sec. 5, Pub. L. 95-627, 92 Stat. 3619 (42 U.S.C. 1772); 42 U.S.C. 1785, 1766, 1772, 1773(e), sec. 203, Pub. L. 96-499, 94 Stat. 2599; secs. 807 and 808, Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1772, 1784, 1760; sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758)) [Amdt. 8, 40 FR 57207, Dec. 8, 1975; 40 FR 58281, Dec. 16, 1975, as amended by Amdt. 10, 41 FR 28783, July 13, 1976; Amdt. 13, 44 FR 33049, June 8, 1979; 47 FR 31852, July 23, 1982; 72 FR 63793, Nov. 13, 2007; 76 FR 22800, Apr. 25, 2011] § 245.4 Exceptions for Puerto Rico and the Virgin Islands. Because the State agencies of Puerto Rico and the Virgin Islands provide free meals or milk to all children in schools under their jurisdiction, regardless of the economic need of the child's family, they are not required to make individual eligibility determinations or publicly announce eligibility criteria. Instead, such State agencies may use a statistical survey to determine the number of children eligible for free or reduced price meals and milk on which a percentage factor for the withdrawal of special cash assistance funds will be developed subject to the following conditions: (a) State agencies shall conduct a statistical survey once every three years in accordance with the standards provided by FNS; (b) State agencies shall submit the survey design to FNS for approval before proceeding with the survey; (c) State agencies shall conduct the survey and develop the factor for withdrawal between July 1 and December 31 of the first school year of the three-year period; (d) State agencies shall submit the results of the survey and the factor for fund withdrawal to FNS for approval before any reimbursement may be received under that factor; (e) State agencies shall keep all material relating to the conduct of the survey and determination of the factor for fund withdrawal in accordance with the record retention requirements in § 210.8(e)(14) of this chapter; (f) Until the results of the triennial statistical survey are available, the factor for fund withdrawal will be based on the most recently established percentages. The Department shall make retroactive adjustments to the States' Letter of Credit, if appropriate, for the year of the survey; (g) If any school in these States wishes to charge a student for meals, the State agency, School Food Authority and school shall comply with all the applicable provisions of this part and parts 210, 215 and 220 of this chapter. (Sec. 9, Pub. L. 95-166, 91 Stat 1336 (42 U.S.C. 1759a); secs. 807 and 808, Pub. L. 97-35, 95 Stat. 521-535, 42 U.S.C. 1772, 1784, 1760; 44 U.S.C. 3506) [Amdt. 18, 45 FR 52771, Aug. 8, 1980, as amended at 46 FR 51366, Oct. 20, 1981; 47 FR 746, Jan. 7, 1982] § 245.5 Public announcement of the eligibility criteria. (a) After the State agency, or FNSRO where applicable, notifies the local educational agency (as defined in § 245.2) that its criteria for determining the eligibility of children for free and reduced price meals and for free milk have been approved, the local educational agency (as defined in § 245.2) shall publicly announce such criteria: Provided however, Schools (1) Except as provided in § 245.6(b), a letter or notice and application distributed on or about the beginning of each school year, to the parents of all children in attendance at school. The letter or notice shall contain the following information: (i) In schools participating in a meal service program, the eligibility criteria for reduced price free (ii) How a household may make application for free or reduced price meals or for free milk for its children; (iii) An explanation that an application for free or reduced price benefits cannot be approved unless it contains complete information as described in paragraph (1)(i) of the definition of Documentation (iv) An explanation that households with children who are members of currently certified SNAP, FDPIR or TANF households may submit applications for these children with the abbreviated information described in paragraph (2)(ii) of the definition of Documentation (v) An explanation that the information on the application may be verified at any time during the school year; (vi) How a household may apply for benefits at any time during the school year as circumstances change; (vii) A statement to the effect that children having parents or guardians who become unemployed are eligible for free or reduced price meals or for free milk during the period of unemployment, Provided, (viii) The statement: “In the operation of child feeding programs, no child will be discriminated against because of race, sex, color, national origin, age or disability;” (ix) An explanation that Head Start enrollees and foster, homeless, migrant, and runaway children, as defined in § 245.2, are categorically eligible for free meals and free milk and their families should contact the school for more information; (x) How a household may appeal the decision of the local educational agencywith respect to the application under the hearing procedure set forth in § 245.7. The letter or notice shall be accompanied by a copy of the application form required under § 245.6. (xi) A statement to the effect that the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) participants may be eligible for free or reduced price meals. (2) On or about the beginning of each school year, a public release, containing the same information supplied to parents, and including both free and reduced price eligibility criteria shall be provided to the informational media, the local unemployment office, and to any major employers contemplating large layoffs in the area from which the school draws its attendance. (b) Copies of the public release shall be made available upon request to any interested persons. Any subsequent changes in a school's eligibility criteria during the school year shall be publicly announced in the same manner as the original criteria were announced. (Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758); Pub. L. 79-396, 60 Stat. 231 (42 U.S.C. 1751); Pub. L. 89-642, 80 Stat. 885-880 (42 U.S.C. 1773); Pub. L. 91-248, 84 Stat. 207 (42 U.S.C. 1759)) [Amdt. 8, 40 FR 57207, Dec. 8, 1975] Editorial Note: For Federal Register www.govinfo.gov. § 245.6 Application, eligibility and certification of children for free and reduced price meals and free milk. (a) General requirements—content of application and descriptive materials. (1) Household applications. (2) Understandable communications. (3) Electronic availability. (4) Transferring eligibility status. (5) Required income information. (i) The income received by each member identified by the household member who received the income or an indication which household members had no income; and (ii) The source of the income (such as earnings, wages, welfare, pensions, support payments, unemployment compensation, social security and other cash income). Other cash income includes cash amounts received or withdrawn from any source, including savings, investments, trust accounts, and other resources which are available to pay for a child's meals or milk. (6) Household members and social security numbers. (7) Adult member's signature. (8) Required statements for the application. (A) “The Richard B. Russell National School Lunch Act requires the information on this application. You do not have to give the information, but if you do not, we cannot approve your child for free or reduced-price meals. You must include the last four digits of the social security number of the adult household member who signs the application. The last four digits of the social security number are not required when you list a Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) Program or Food Distribution Program on Indian Reservations (FDPIR) case number or other FDPIR identifier for your child or when you indicate that the adult household member signing the application does not have a social security number. We will use your information to determine if your child is eligible for free or reduced-price meals, and for administration and enforcement of the lunch and breakfast programs. We MAY share your eligibility information with education, health, and nutrition programs to help them evaluate, fund, or determine benefits for their programs, auditors for program reviews, and law enforcement officials to help them look into violations of program rules.” (B) “Foster, migrant, homeless, and runaway children, and children enrolled in a Head Start program are categorically eligible for free meals and free milk. If you are completing an application for these children, contact the school for more information.” (ii) When either the State agency or the local educational agency plans to use or disclose children's eligibility information for non-program purposes, additional information, as specified in paragraph (h) of this section, must be added to this statement. State agencies and local educational agencies are responsible for drafting the appropriate statement. (9) Attesting to information on the application. (b) Direct certification. (1) Mandatory direct certification of children in SNAP households. SNAP, (ii) Schools participating only in the Special Milk Program authorized under part 215 of this chapter may directly certify children for that program but are not required to conduct direct certification with SNAP. In addition, residential child care institutions, as defined in paragraph (c) of the definition of School (iii) Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12. (iv) Each State agency must enter into an agreement with the State agency conducting eligibility determinations for SNAP. SNAP, (v) Local educational agencies and schools currently operating Provision 2 or Provision 3 in non-base years, or the community eligibility provision, as permitted under § 245.9, are required to conduct a data match between Supplemental Nutrition Assistance Program records and student enrollment records at least once annually. State agencies may conduct data matching on behalf of LEAs and exempt LEAs from this requirement. (2) Children who may be directly certified. FDPIR TANF, Foster child, Homeless child, Migrant, Runaway child, Head Start child, (3) Frequency of direct certification contacts with SNAP. SNAP (ii) (A) Beginning in School Year 2011-2012, at a minimum, all local educational agencies must conduct direct certification as follows: ( 1 ( 2 ( 3 (B) The information used shall be the most recent available. (iii) The names of all newly enrolled children and all children not certified for free meals shall be submitted for the direct certification required in paragraph (b)(3)(ii)(B) and paragraph (b)(3)(ii)(C) of this section. Newly enrolled children must be provided with application materials in order to alleviate a delay in receipt of free meals or free milk if direct certification for these children cannot be completed promptly upon enrollment. (iv) State agencies are encouraged to conduct direct certification more frequently to obtain information about newly enrolled children or children who may be newly certified for that program's benefits. (4) Frequency of direct certification with other programs. (5) Direct certification documentation. Documentation (ii) (A) Beginning in School Year 2012-2013, direct certification with SNAP SNAP, (B) Letters or other documents may be used as the primary method for direct certification to document receipt of FDPIR TANF (iii) Individual notices from officials of eligible programs for a Foster child, Homeless child, Migrant child, Runaway child, Head Start child, (6) Officials who can provide documentation for direct certification. SNAP FDPIR TANF, (ii) For a Foster child, Homeless child, Migrant child, Head Start child, (7) Extension of eligibility to all children in a family. Family, (8) Foster, Homeless, Migrant, Runaway, or Head Start Children. (9) Confidential nature of direct certification information. (10) Notification to families. (c) Determination of eligibility Duration of eligibility. (2) Use of prior year's eligibility status. (3) Exceptions for year-long duration of eligibility Voluntary reporting of changes. (ii) Households must attest to changes in information as specified in § 245.6(a)(9). In addition, benefits cannot be reduced by information received through other sources without the written consent of the household, except for information received through verification. (iii) Changes resulting from verification or administrative reviews. (4) Calculating income. (5) Categorical eligibility SNAP, FDPIR, TANF Documentation Family, (ii) Foster, homeless, migrant, andrunaway children and Head Start enrollees. Documentation, (6) Notice of approval Income applications. (ii) Direct Certification. Categorically eligible, (iii) Households declining benefits. (7) Denied applications and the notice of denial. (i) The reason for the denial of benefits, e.g. income in excess of allowable limits or incomplete application; (ii) Notification of the right to appeal; (iii) Instructions on how to appeal; and (iv) A statement reminding parents that they may reapply for free or reduced price benefits at any time during the school year. (8) Appeals of denied benefits. (d) Households that fail to apply. (e) Recordkeeping. (f) Disclosure of children's free and reduced price meal or free milk eligibility information to education and certain other programs and individuals without parental consent. (1) Persons authorized to receive eligibility information. (2) Disclosure of children's names and eligibility status only. (i) A Federal education program; (ii) A State health program or State education program administered by the State or local education agency; (iii) A Federal, State, or local means-tested nutrition program with eligibility standards comparable to the National School Lunch Program (i.e., food assistance programs for households with incomes at or below 185 percent of the Federal poverty level); or (iv) A third party contractor assisting in verification of eligibility efforts by contacting households who fail to respond to requests for verification of their eligibility. (3) Disclosure of all eligibility information in addition to eligibility status. (i) Persons directly connected with the administration or enforcement of programs authorized under the Richard B. Russell National School Lunch Act or the Child Nutrition Act of 1966. This means that all eligibility information obtained for the National School Lunch Program, School Breakfast Program or Special Milk Program may be disclosed to persons directly connected with administering or enforcing regulations under the National School Lunch or School Breakfast Programs (Parts 210 and 220, respectively, of this chapter), Child and Adult Care Food Program (Part 226 of this chapter), Summer Food Service Program (Part 225 of this chapter) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) (Part 246 of this chapter); (ii) The Comptroller General of the United States for purposes of audit and examination; and (iii) Federal, State, and local law enforcement officials for the purpose of investigating any alleged violation of the programs listed in paragraphs (g)(3) and (g)(4) of this section. (4) Use of free and reduced price meal or free milk eligibility information by other programs other than Medicaid or the State Children's Health Insurance Program (SCHIP). (g) Disclosure of children's eligibility information to Medicaid and/or SCHIP, unless parents decline. (1) The State agency must ensure that: (i) The child care institution and health insurance program officials have a written agreement that requires the health insurance program agency to use the eligibility information to seek to enroll children in Medicaid and SCHIP; and (ii) Parents/guardians are notified that their eligibility information may be disclosed to Medicaid or SCHIP and given an opportunity to decline to have their children's eligibility information disclosed, prior to any disclosure. (2) Use of children's free and reduced price meal eligibility information by Medicaid/SCHIP. (h) Notifying households of potential uses and disclosures of children's eligibility information. (1) For disclosures to programs, other than Medicaid or SCHIP, that are permitted access to children's eligibility information, without parent/guardian consent, the State agency or local educational agency, as appropriate, must notify parents/guardians at the time of application that their children's free and reduced price meal or free milk eligibility information may be disclosed. The State agency or local educational agency, as appropriate, must add substantially the following statement to the statement required under paragraph (a)(8)(i) of this section, “We may share your eligibility information with education, health, and nutrition programs to help them evaluate, fund, or determine benefits for their programs; auditors for program reviews; and law enforcement officials to help them look into violations of program rules.” For children determined eligible through direct certification, the notice of potential disclosure may be included in the document informing parents/guardians of their children's eligibility for free meals or free milk through direct certification. (2) For disclosure to Medicaid or SCHIP, the State agency or local educational agency, as appropriate, must notify parents/guardians that their children's free and reduced price meal or free milk eligibility information will be disclosed to Medicaid and/or SCHIP unless the parent/guardian elects not to have their information disclosed. Additionally, the State agency or local educational agency, as appropriate, must give parents/guardians an opportunity to elect not to have their information disclosed to Medicaid or SCHIP. Only the parent or guardian who is a member of the household or family for purposes of the free and reduced price meal or free milk application may decline the disclosure of eligibility information to Medicaid or SCHIP. The notification must inform parents/guardians that they are not required to consent to the disclosure, that the information, if disclosed, will be used to identify children eligible for and to seek to enroll children in a health insurance program, and that their decision will not affect their children's eligibility for free and reduced price meals or free milk. The notification may be included in the letter/notice to parents/guardians that accompanies the free and reduced price meal or free milk application, on the application itself or in a separate notice provided to parents/guardians. The notice must give parents/guardians adequate time to respond. The State agency or local educational agency, as appropriate, must add substantially the following statement to the statement required under paragraph (a)(8)(i) of this section, “We may share your information with Medicaid or the State Children's Health Insurance Program, unless you tell us not to. The information, if disclosed, will be used to identify eligible children and seek to enroll them in Medicaid or SCHIP.” For children determined eligible through direct certification, the notice of potential disclosure and opportunity to decline the disclosure may be included in the document informing parents/guardians of their children's eligibility for free meal or free milk through direct certification. (i) Other disclosures. (1) The consent must identify the information that will be shared and how the information will be used. (2) The consent statement must be signed and dated by the child's parent or guardian who is a member of the household for purposes of the free and reduced price meal or free milk application. (3) There must be a statement informing parents and guardians that failing to sign the consent will not affect the child's eligibility for free or reduced price meals or free milk and that the individuals or programs receiving the information will not share the information with any other entity or program. (4) Parents/guardians must be permitted to limit the consent only to those programs with which they wish to share information. (j) Agreements with programs/individuals receiving children's free and reduced price meal or free milk eligibility information. (2) The State agency or school food authorities, as appropriate, must have a written agreement with the State or local agency or agencies administering Medicaid or SCHIP prior to disclosing children's free and reduced price meal or free milk eligibility information. At a minimum, the agreement must: (i) Identify the health insurance program or health agency receiving children's eligibility information; (ii) Describe the information that will be disclosed; (iii) Require that the Medicaid or SCHIP agency use the information obtained and specify that the information must be used to seek to enroll children in Medicaid or SCHIP; (iv) Require that the Medicaid or SCHIP agency describe how they will use the information obtained; (v) Describe how the information will be protected from unauthorized uses and disclosures; (vi) Describe the penalties for unauthorized disclosure; and (vii) Be signed by both the Medicaid or SCHIP program or agency and the State agency or child care institution, as appropriate. (k) Penalties for unauthorized disclosure or misuse of information. (Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758)) [35 FR 14065, Sept. 4, 1970] Editorial Note: For Federal Register www.govinfo.gov. § 245.6a Verification requirements. (a) Definitions Eligible programs. (i) SNAP, (ii) The Food Distribution Program on Indian Reservations (FDPIR) as defined in § 245.2; and (iii) A State program funded under the program of block grants to States for temporary assistance for needy families (TANF) as defined in § 245.2. (2) Error prone application. (3) Non-response rate. (4) Official poverty line. (5) Sample size. (6) School year. (7) Sources of information. (i) Written evidence shall be used as the primary source of information for verification. Written evidence includes written confirmation of a household's circumstances, such as wage stubs, award letters, and letters from employers. Whenever written evidence is insufficient to confirm income information on the application or current eligibility, the local educational agency may require collateral contacts. (ii) Collateral contacts are verbal confirmations of a household's circumstances by a person outside of the household. The collateral contact may be made in person or by phone. The verifying official may select a collateral contact if the household fails to designate one or designates one which is unacceptable to the verifying official. If the verifying official designates a collateral contact, the contact shall not be made without providing written or oral notice to the household. At the time of this notice, the household shall be informed that it may consent to the contact or provide acceptable documentation in another form. If the household refuses to choose one of these options, its eligibility shall be terminated in accordance with the normal procedures for failure to cooperate with verification efforts. Collateral contacts could include employers, social service agencies, and migrant agencies. (iii) Agency records to which the State agency or local educational agency may have access are not considered collateral contacts. Information concerning income, household size, or SNAP, FDPIR, or TANF eligibility, maintained by other government agencies to which the State agency, the local educational agency, or school can legally gain access, may be used to confirm a household's income, size, or receipt of benefits. Information may also be obtained from individuals or agencies serving foster, homeless, migrant, or runaway children, as defined in § 245.2. Agency records may be used for verification conducted after the household has been notified of its selection for verification or for the direct verification procedures in paragraph (g) of this section. (iv) Households which dispute the validity of income information acquired through collateral contacts or a system of records shall be given the opportunity to provide other documentation. (b) Deadline and extensions for local educational agencies Deadline. (2) Deadline extensions. (ii) In the case of natural disaster, civil disorder or other local conditions, USDA may substitute alternatives for the verification deadline in paragraph (b)(1) of this section. (3) Beginning verification activities. (c) Verification requirement General. (i) A State may, with the written approval of FNS, assume responsibility for complying with the verification requirements of this section on behalf of its local educational agencies. When assuming such responsibility, States may qualify, if approved by FNS, to use one of the alternative sample sizes provided for in paragraph (c)(4) of this section if qualified under paragraph (d) of this section. (ii) An application must be approved if it contains the essential documentation specified in the definition of Documentation (2) Exceptions from verification. (3) Standard sample size. (i) Three (3) percent of all applications approved by the local educational agency for the school year, as of October 1 of the school year, selected from error prone applications; or (ii) 3,000 error prone applications approved by the local educational agency for the school year, as of October 1 of the school year. (iii) Local educational agencies shall not exceed the standard sample size in paragraphs (c)(3)(i) or (c)(3)(ii) of this section, as applicable, and, unless eligible for one of the alternative sample sizes provided in paragraph (c)(4) of this section, the local educational agency shall not use a smaller sample size than those in paragraphs (c)(3)(i) or (c)(3)(ii) of this section, as applicable. (iv) If the number of error-prone applications exceeds the required sample size, the local educational agency shall select the required sample at random, i.e., each application has an equal chance of being selected, from the total number of error-prone applications. (4) Alternative sample sizes. (i) Alternative One. (A) 3,000 of all applications selected at random from applications approved by the local educational agency as of October 1 of the school year; or (B) Three (3) percent of all applications selected at random from applications approved by the local educational agency as of October 1 of the school year. (ii) Alternative Two. (A) 1,000 of all applications approved by the local educational agency as of October 1 of the school year, selected from error prone applications or (B) One (1) percent of all applications approved by the local educational agency as of October 1 of the school year, selected from error prone applications PLUS (C) The lesser of: ( 1 ( 2 1/2 (5) Completing the sample size. (6) Local conditions. (7) Verification for cause. (d) Eligibility for alternative sample sizes State agency oversight. (2) Lowered non-response rate. (3) Improved non-response rate. (4) Continuing eligibility for alternative sample sizes. (e) Activities prior to household notification Confirmation of a household's initial eligibility. (A) If the eligibility status changes from reduced price to free, make the increased benefits immediately available and notify the household of the change in benefits; the local educational agency will then verify the application; (B) If the eligibility status changes from free to reduced price, first verify the application and then notify the household of the correct eligibility status after verification is completed and, if required, send the household a notice of adverse action in accordance with paragraph (j) of this section; or (C) If the eligibility status changes from free or reduced price to paid, send the household a notice of adverse action in accordance with paragraph (j) of this section and do not conduct verification on this application and select a similar application (for example, another error-prone application) to replace it. (ii) The requirements in paragraph (e)(1)(i) of this section are waived if the local educational agency is using a technology-based system that demonstrates a high level of accuracy in processing an initial eligibility determination based on the income eligibility guidelines for the National School Lunch Program. Any local educational agency that conducts a confirmation review of all applications at the time of certification meets this requirement. The State agency may request documentation to support the accuracy of the local educational agency's system. If the State agency determines that the technology-based system is inadequate, it may require that the local educational agency conduct a confirmation review of each application selected for verification. (2) Replacing applications. (f) Verification procedures and assistance for households Notification of selection. (i) They are required to submit the requested information to verify eligibility for free or reduced-price meals, by the date determined by the local educational agency. (ii) They may, instead, submit proof that the children receive SNAP, FDPIR, or TANF assistance, as explained in paragraph (f)(3) of this section. (iii) They may, instead, request that the local educational agency contact the appropriate officials to confirm that their children are foster, homeless, migrant, or runaway, as defined in § 245.2. (iv) Failure to cooperate with verification efforts will result in the termination of benefits. (2) Documentation timeframe. (3) SNAP FDPIR or TANF recipients. (4) Household cooperation. (5) Telephone assistance. (6) Followup attempts. (7) Eligibility changes. (g) Direct verification. et seq. et seq. (1) Names submitted. (2) Eligible programs. (3) States with Medicaid Income Limits of 133%. (4) States with Medicaid Income Limits between 133%-185%. (5) Documentation timeframe. (6) Incomplete information. (h) Verification reporting and recordkeeping requirements. (i) Nondiscrimination. (j) Adverse action. (1) The change; (2) The reasons for the change; (3) Notification of the right to appeal and when the appeal must be filed to ensure continued benefits while awaiting a hearing and decision; (4) Instructions on how to appeal; and (5) The right to reapply at any time during the school year. The reasons for ineligibility shall be properly documented and retained on file at the local educational agency. (Sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758)) [48 FR 12510, Mar. 25, 1983, as amended at 49 FR 26034, June 26, 1984; 52 FR 19275, May 22, 1987; 55 FR 19240, May 9, 1990; 56 FR 32950, July 17, 1991; 56 FR 33861, July 24, 1991; 64 FR 50744, Sept. 20, 1999; 64 FR 72474, Dec. 28, 1999; 66 FR 48328, Sept. 20, 2001; 68 FR 53489, Sept. 11, 2003; 72 FR 63795, Nov. 13, 2007; 73 FR 76859, Dec. 18, 2008; 76 FR 22802, Apr. 25, 2011; 78 FR 12230, Feb. 22, 2013; 78 FR 13453, Feb. 28, 2013] § 245.7 Hearing procedure for families and local educational agencies. (a) Each local educational agency of a school participating in the National School Lunch Program, School Breakfast Program or the Special Milk Program or of a commodity only school shall establish a hearing procedure under which: (1) A family can appeal from a decision made by the local educational agency with respect to an application the family has made for free or reduced price meals or for free milk, and (2) The local educational agency can challenge the continued eligibility of any child for a free or reduced price meal or for free milk. The hearing procedure shall provide for both the family and the local educational agency: (i) A simple, publicly announced method to make an oral or written request for a hearing; (ii) An opportunity to be assisted or represented by an attorney or other person; (iii) An opportunity to examine, prior to and during the hearing, any documents and records presented to support the decision under appeal; (iv) That the hearing shall be held with reasonable promptness and convenience, and that adequate notice shall be given as to the time and place of the hearing; (v) An opportunity to present oral or documentary evidence and arguments supporting a position without undue interference; (vi) An opportunity to question or refute any testimony or other evidence and to confront and cross-examine any adverse witnesses; (vii) That the hearing shall be conducted and the decision made by a hearing official who did not participate in making the decision under appeal or in any previously held conference; (viii) That the decision of the hearing official shall be based on the oral and documentary evidence presented at the hearing and made a part of the hearing record; (ix) That the parties concerned and any designated representative shall be notified in writing of the decision of the hearing official; (x) That a written record shall be prepared with respect to each hearing, which shall include the challenge or the decision under appeal, any documentary evidence and a summary of any oral testimony presented at the hearing, the decision of the hearing official, including the reasons therefor, and a copy of the notification to the parties concerned of the decision of the hearing official; and (xi) That the written record of each hearing shall be preserved for a period of 3 years and shall be available for examination by the parties concerned or their representatives at any reasonable time and place during that period. (b) Continuation of benefits. (1) Households that have been approved for benefits and that are subject to a reduction or termination of benefits later in the same school year shall receive continued benefits if they appeal the adverse action within the 10 day advance notice period; and (2) Households that are denied benefits upon application shall not receive benefits. (44 U.S.C. 3506; sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758)) [Amdt. 6, 39 FR 30339, Aug. 22, 1974, as amended at 47 FR 746, Jan. 7, 1982; 48 FR 12511, Mar. 25, 1983; 72 FR 63796, Nov. 13, 2007] § 245.8 Nondiscrimination practices for children eligible to receive free and reduced price meals and free milk. School Food Authorities and local educational agencies of schools participating in the National School Lunch Program, School Breakfast Program or Special Milk Program or of commodity only schools shall take all actions that are necessary to insure compliance with the following nondiscrimination practices for children eligible to receive free and reduced price meals or free milk: (a) The names of the children shall not be published, posted or announced in any manner; (b) There shall be no overt identification of any of the children by the use of special tokens or tickets or by any other means; (c) The children shall not be required to work for their meals or milk; (d) The children shall not be required to use a separate dining area, go through a separate serving line, enter the dining area through a separate entrance or consume their meals or milk at a different time; (e) When more than one lunch or breakfast or type of milk is offered which meets the requirements prescribed in § 210.10, § 220.8 or the definition of Milk [Amdt. 6, 39 FR 30339, Aug. 22, 1974, as amended at 72 FR 63796, Nov. 13, 2007] § 245.9 Special assistance certification and reimbursement alternatives. (a) Provision 1. free meals (1) A Local educational agency of a school operating under provision 1 requirements shall publicly notify in accordance with § 245.5, parents of enrolled children who are receiving free meals once every two consecutive school years, and shall publicly notify in accordance with § 245.5, parents of all other enrolled children on an annual basis. (2) The 80 percent enrollment eligibility for this alternative shall be based on the school's March enrollment data of the previous school year, or on other comparable data. (3) A Local educational agency of a school operating under provision 1, shall count the number of free, reduced price and paid meals served to children in that school as the basis for monthly reimbursement claims. (b) Provision 2. (1) Meals at no charge. (2) Cost differential. (3) Meal counts. (i) Monthly percentages. (ii) Annual percentages. (4) Local educational agency claims review process. (5) Verification. (6) Base year. base year (i) Duration of the base year. (ii) Delayed implementation. (c) Extension of Provision 2. (1) Extension criteria. (i) Available and approved sources of socioeconomic data. (ii) Negligible improvement. (2) Extension not approved. (i) Return to standard meal counting and claiming. (ii) Establish a new base year. (iii) Establish a streamlined base year. (A) Enrollment based percentages. (B) Participation based percentages. (iv) Establish a Provision 3 base year. (d) Provision 3. except that (1) Meals at no charge. (2) Cost differential. (3) Meal counts. (i) The State agency determines that enrollment, participation and meal counts do not vary; and (ii) There is an approved mechanism in place to ensure that students will receive reimbursable meals. (4) Annual adjustments. (i) Multiplying the average daily meal count by type (free, reduced price and paid) by the difference in the number of operating days between the base year and the current year and adding/subtracting that number of meals from the Claim for Reimbursement, as appropriate. In developing the average daily meal count by type for the current school year, schools shall use the base year data adjusted by enrollment; or (ii) Multiplying the dollar amount otherwise payable (i.e., the base year level of assistance, as adjusted by enrollment and inflation) by the ratio of the number of operating days in the current year to the number of operating days in the base year. (5) Reporting requirements. (6) Local educational agency claims review process. (7) Verification. (e) Extension of Provision 3. (1) Extension criteria. (i) Available and approved sources of socioeconomic data. (ii) Negligible improvement. (2) Extension not approved. (i) Return to standard meal counting and claiming. (ii) Establish a new base year. (iii) Establish a streamlined base year. (A) Enrollment based percentages. (B) Participation based percentages. (iv) Establish a Provision 2 base year. (f) Community eligibility. (1) Definitions. (i) Enrolled students (ii) Identified students (iii) Identified student percentage (2) Implementation. (3) Eligibility criteria. (i) Minimum identified student percentage. (ii) Lunch and breakfast program participation. (iii) Compliance. (4) Community eligibility provision procedures Election documentation and deadline. (ii) State agency review of election documentation. (iii) Meals at no cost. (iv) Household applications. (v) Free and paid claiming percentages. (A) To determine the free claiming percentage, multiply the applicable identified student percentage by a factor of 1.6. The product of this calculation may not exceed 100 percent. The difference between the free claiming percentage and 100 percent represents the paid claiming percentage. The applicable identified student percentage means: ( 1 ( 2 (B) To determine the number of lunches to claim for reimbursement, multiply the free claiming percentage as described in this paragraph by the total number of reimbursable lunches served to determine the number of free lunches to claim for reimbursement. The paid claiming percentage is multiplied by the total number of reimbursable lunches served to determine the number of paid lunches to claim for reimbursement. In the breakfast meal service, the free and paid claiming percentages are multiplied by the total number of reimbursable breakfasts served to determine the number of free and paid breakfasts to claim for reimbursement. For any claim, if the total number of meals claimed for free and paid reimbursement does not equal the total number of meals served, the paid category must be adjusted so that all served meals are claimed for reimbursement. (vi) Multiplier factor. (vii) Cost differential. (viii) New 4-year cycle. (ix) Grace year. (5) Identification of potential community eligibility schools. (i) Schools with an identified student percentage of at least 25 percent; (ii) Schools with an identified student percentage that is less than 25 percent but greater than or equal to 15 percent; and (iii) Schools currently in year 4 of the community eligibility provision with an identified student percentage that is less than 25 percent but greater than or equal to 15 percent. (6) State agency notification requirements. (i) Local educational agencies with an identified student percentage of at least 25 percent district wide, of the potential to participate in community eligibility in the subsequent year; the estimated cash assistance the local educational agency would receive; and the procedures to participate in community eligibility. (ii) Local educational agencies with an identified student percentage that is less than 25 percent district wide but greater than or equal to 15 percent, that they may be eligible to participate in community eligibility in the subsequent year if they meet the eligibility requirements set forth in paragraph (f)(3) of this section as of April 1. (iii) Local educational agencies currently using community eligibility district wide, of the options available in establishing claiming percentages for next school year. (iv) Local educational agencies currently in year 4 with an identified student percentage district wide that is less than 25 percent but greater than or equal to 15 percent, of the grace year eligibility. (7) Public notification requirements. (i) The names of schools identified in paragraph (f)(5) of this section, grouped as follows: Schools with an identified student percentage of least 25 percent, schools with an identified student percentage of less than 25 percent but greater than or equal to 15 percent, and schools currently in year 4 of the community eligibility provision with an identified student percentage that is less than 25 percent but greater than or equal to 15 percent. (ii) The names of local educational agencies receiving State agency notification as required under paragraph (f)(6) of this section, grouped as follows: Local educational agencies with an identified student percentage of at least 25 percent district wide, local educational agencies with an identified student percentage that is less than 25 percent district wide but greater than or equal to 15 percent, local educational agencies currently using community eligibility district wide, and local educational agencies currently in year 4 with an identified student percentage district wide that is less than 25 percent but greater than or equal to 15 percent. (iii) The State agency must maintain eligibility lists as described in paragraphs (i) and (ii) of this section until such time as new lists are made available annually by May 1. (8) Notification data. (i) Obtain data representative of the current school year, and (ii) Use the identified student percentage as defined in paragraph (f)(1) of this section. If school-specific identified student percentage data are not readily available by school, use direct certifications as a percentage of enrolled students, i.e., (iii) If data are not as of April 1 of the current school year, ensure the data includes a notation that the data are intended for informational purposes and do not confer eligibility for community eligibility. Local educational agencies must meet the eligibility requirements specified in paragraph (f)(3) of this section to participate in community eligibility. (9) Other uses of the free claiming percentage. i.e., (g) Policy statement requirement. (1) Amend its Free and Reduced Price Policy Statement, specified in § 245.10 of this part, to include a list of all schools participating in each of the special assistance provisions specified in this section. The following information must also be included for each school: (i) The initial school year of implementing the special assistance provision; (ii) The school years the cycle is expected to remain in effect; (iii) The school year the special assistance provision must be reconsidered; and (iv) The available and approved data that will be used in reconsideration, as applicable. (2) Certify that the school(s) meet the criteria for participating in each of the special assistance provisions, as specified in paragraphs (a), (b), (c), (d), (e) or (f) of this section, as appropriate. (h) Recordkeeping. (1) Base year records. (2) Non-base year records. (3) Records for the community eligibility provision. (i) Availability of documentation. (j) Restoring standard meal counting and claiming. (1) Notify the State agency of the intention to stop participating in a special assistance certification and reimbursement alternative under this section and seek State agency guidance and review regarding the restoration of standard operating procedures. (2) Notify the public and meet the certification and verification requirements of §§ 245.6 and 245.6a in affected schools. (k) Puerto Rico and Virgin Islands. (l) Transferring eligibility for free meals during the school year. (m) Statistical income measurements. (1) For enrollment based claiming percentages, statistical income measurements must meet the following standards: (i) The sample frame shall be limited to enrolled students who have access to the school meals program; (ii) A sample of enrolled students shall be randomly selected from the sample frame; (iii) The response rate to the survey shall be at least 80 percent; (iv) The number of households that complete the survey shall be sufficiently large so that it can be asserted with 95 percent confidence that the true percentage of students who are enrolled in the school, have access to the school meals program, and are eligible for free meals is within plus or minus 2.5 percentage points of the point estimate determined from the sample; and (v) To minimize statistical bias, data from all households that complete the survey must be used when calculating the enrollment based claiming percentages for paragraphs (c)(2)(iii)(A) and (e)(2)(iii)(A) of this section. (2) For participation based claiming percentages, statistical income measurements must meet the following standards: (i) The sample frame must be limited to students participating in the meal program for which the participation based claiming percentages are being developed; (ii) The sample frame must represent multiple operating days, as established through guidance, in the meal program for which the participation based claiming percentages are being developed; (iii) A sample of participating students shall be randomly selected from the sample frame; (iv) The response rate to the survey shall be at least 80 percent; (v) The number of households that complete the survey shall be sufficiently large so that it can be asserted with 95 percent confidence that the true percentage of participating students who are eligible for free meals is within plus or minus 2.5 percentage points of the point estimate determined from the sample; and, (vi) To minimize statistical bias, data from all households that complete the survey must be used when calculating the participation based claiming percentages for paragraphs (c)(2)(iii)(B) and (e)(2)(iii)(B) of this section. (Sec. 9, Pub. L. 95-166, 91 Stat. 1336 (42 U.S.C. 1759a); secs. 805, and 819, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1773)) [Amdt. 19, 45 FR 67287, Oct. 10, 1980, as amended by Amdt. 23, 47 FR 14135, Apr. 2, 1982; 66 FR 48328, Sept. 20, 2001; 76 FR 22802, Apr. 25, 2011; 81 FR 50206, July 29, 2016] § 245.10 Action by local educational agencies. (a) Each local educational agencyof a school desiring to participate in the National School Lunch Program, School Breakfast Program, or to provide free milk under the Special Milk Program, or to become a commodity-only school shall submit for approval to the State agency a free and reduced price policy statement. Once approved, the policy statement shall be a permanent document which may be amended as necessary, except as specified in paragraph (c) of this section. Such policy statement, as a minimum, shall contain the following: (1) The official or officials designated by the local educational agency to make eligibility determinations on its behalf for free and reduced price meals or for free milk; (2) An assurance that for children who are not categorically eligible for free and reduced price benefits the local educational agency will determine eligibility for free and reduced price meals or free milk in accordance with the current Income Eligibility Guidelines. (3) The specific procedures the local educational agency will use in accepting applications from families for free and reduced price meals or for free milk. Additionally, the local educational agency must include the specific procedures it will use for obtaining documentation for determining children's eligibility through direct certification, in lieu of an application. Local educational agencies shall also provide households that are directly certified with a notice of eligibility, as specified in § 245.6(c)(2) and shall include in their policy statement a copy of such notice. (4) A description of the method or methods to be used to collect payments from those children paying the full price of the meal or milk, or a reduced price of a meal, which will prevent the overt identification of the children receiving a free meal or free milk or a reduced price meal, and (5) An assurance that the school will abide by the hearing procedure set forth in § 245.7 and the nondiscrimination practices set forth in § 245.8. (b) The policy statement submitted by each local educational agency shall be accompanied by a copy of the application form to be used by the school and of the proposed letter or notice to parents. (c) Each local educational agency shall amend its permanent free and reduced price policy statement to reflect substantive changes. Any amendment to a policy shall be approved by the State agency prior to implementation, or as provided in paragraph (e) of this section. Each year, if a local educational agency does not have its policy statement approved by the State agency, or FNSRO where applicable, by October 15, reimbursement shall be suspended for any meals or milk served until such time as the local educational agency's free and reduced price policy statement has been approved by the State agency, or FNSRO where applicable. Furthermore, no commodities donated by the Department shall be used in any school after October 15, until such time as the local educational agency's free and reduced price policy statement has been approved by the State agency, or FNSRO where applicable. Once the local educational agency's free and reduced price policy statement has been approved, reimbursement may be allowed, at the discretion of the State agency, or FNSRO where applicable, for eligible meals and milk served during the period of suspension. (d) If any free and reduced price policy statement submitted for approval by any local educational agency to the State agency, or FNSRO where applicable, is determined to be not in compliance with the provisions of this part, the local educational agency shall submit a policy statement that does meet the provisions within 30 days after notification by the State agency, or FNSO where applicable. (e) When revision of a local educational agency's approved free and reduced price policy statement is necessitated because of a change in the family-size income standards of the State agency, or FNSRO where applicable, or because of other program changes, the local educational agency shall have 60 days from the date the State agency announces the change in which to have its revised policy statement approved by the State agency, or FNSRO where applicable. In the event that a local educational agency's proposed revised free and reduced price policy statement has not been submitted to, and approved by, the State agency, or FNSRO where applicable, within 60 days following the public announcement by the State agency, reimbursement shall be suspended for any meals or milk served after the end of the 60-day period. No commodities donated by the Department shall be used in any school after the end of the 60-day period, until such time as the local educational agency's free and reduced price policy statement has been approved by the State agency, or FNSRO where applicable. Reimbursement may be allowed at the discretion of the State agency, or FNSRO where applicable, for eligible meals and milk served during the period of suspension once the local educational agency's free and reduced price policy statement has been approved by the State agency, or FNSRO where applicable. Pending approval of a revision of a policy statement, the existing statement shall remain in effect. (Sec. 8, Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1758); sec. 5, Pub. L. 95-627, 92 Stat. 3619 (42 U.S.C. 1772); 44 U.S.C. 3506; sec. 803, Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1758)) [35 FR 14065, Sept. 4, 1970, as amended at 38 FR 14958, June 7, 1973; Amdt. 6, 39 FR 30339, Aug. 22, 1974; Amdt. 8, 40 FR 57208, Dec. 8, 1975; Amdt. 13, 44 FR 33049, June 8, 1979; 47 FR 746, Jan. 7, 1982; 48 FR 12511, Mar. 25, 1983; 64 FR 50744, Sept. 20, 1999; 64 FR 72474, Dec. 28, 1999; 72 FR 63796, Nov. 13, 2007; 76 FR 22802, Apr. 25, 2011] § 245.11 Second review of applications. (a) General. (b) State agency requirements Selection criteria. (i) Administrative review certification errors. (ii) State agency discretion. (2) Reporting requirement. (i) The number of free and reduced price applications subject to a second review; (ii) The number of reviewed applications for which the eligibility determination was changed; (iii) The percentage of reviewed applications for which the eligibility determination was changed; and (iv) A summary of the types of changes that were made. (3) State agencies must provide technical assistance to ameliorate certification related problems at local educational agencies determined to be at risk for certification. (c) Local educational agency requirements. (1) Timeframes. (2) Duration of requirement to conduct a second review of applications. (3) Reporting requirement. (i) The number of free and reduced price applications subject to a second review; (ii) The number of reviewed applications for which the eligibility determination was changed; (iii) The percentage of reviewed applications for which the eligibility determination was changed; and (iv) A summary of the types of changes that were made. [79 FR 7054, Feb. 6, 2014] § 245.12 Action by State agencies and FNSROs. (a) Each State agency, or FNSRO where applicable, shall, for schools under its jurisdiction: (1) As necessary, each State agency or FNSRO, as applicable, shall issue a prototype free and reduced price policy statement and any other instructions to ensure that each local educational agency as defined in § 245.2 is fully informed of the provisions of this part. If the State elects to establish for all schools a maximum price for reduced price lunches that is less than 40 cents, the State shall establish such price in its prototype policy. Such State shall then receive the adjusted national average factor provided for in § 210.4(b); (2) Prescribe and publicly announce by July 1 of each fiscal year, in accordance with § 245.3(a), family-size income standards. Any standards prescribed by FNSRO with respect to nonprofit private schools shall be developed by FNSRO after consultation with the State agency. (a-1) When a revision of the family-size income standards of the State agency, or FNSRO where applicable, is necessitated because of a change in the Secretary's income poverty guidelines or because of other program changes, the State agency shall publicly announce its revised family-size income standards no later than 30 days after the Secretary has announced such change. (b) State agencies, and FNSRO where applicable, shall review the policy statements submitted by school-food authorities for compliance with the provisions of this part and inform the school-food authorities of any necessary changes or amendments required in any policy statement to bring such statement into compliance. They shall notify school-food authorities in writing of approval of their policy statements and shall direct them to distribute promptly the public announcements required under the provisions of § 245.5. (c) Each State agency, or FNSRO where applicable, shall instruct local educational agencies under their jurisdiction that they may not alter or amend the eligibility criteria set forth in an approved policy statement without advance approval of the State agency, or FNSRO where applicable. (d) Not later than 10 days after the State agency, or FNSRO where applicable, announces its family-size income standards, it shall notify local educational agencies in writing of any amendment to their free and reduced price policy statements necessary to bring the family-sized income criteria into conformance with the State agency's or FNSRO's family-size income standards. (e) Except as provided in § 245.10, the State agency, or FNSRO where applicable, shall neither disburse any funds, nor authorize the distribution of commodities donated by the Department to any school unless the local educational agency has an approved free and reduced price policy statement on file with the State Agency, or FNSRO where applicable. (f) Each State agency, or FNSRO where applicable, shall, in the course of its supervisory assistance, review and evaluate the performance of local educational agencies and of schools in fulfilling the requirements of this part, and shall advise local educational agencies of any deficiencies found and any corrective action required to be taken. (g) The State agency must notify FNS whether the TANF Program in their State is comparable to or more restrictive than the State's Aid to Families with Dependent Children Program that was in effect on June 1, 1995. Automatic eligibility and direct certification for TANF households is allowed only in States in which FNS has been assured that the TANF standards are comparable to or more restrictive than the program it replaced. State agencies must inform FNS when there is a change in the State's TANF Program that would no longer make households participating in TANF automatically eligible for free school meals. (h) The State agency shall take action to ensure the proper implementation of Provisions 1, 2, and 3. Such action shall include: (1) Notification. (2) Return to standard procedures. (3) Technical assistance. (i) The school or school food authority has not correctly implemented Provision 1, Provision 2 or Provision 3; (ii) Meal quality has declined because of the implementation of the provision; (iii) Participation in the program has declined over time; (iv) Eligibility determinations or the verification procedures were incorrectly conducted; or (v) Meal counts were incorrectly taken or incorrectly applied. (4) State agency recordkeeping. (i) The number of schools using Provision 1, Provision 2 and Provision 3 for NSLP; (ii) The number of schools using Provision 2 and Provision 3 for SBP only; (iii) The number of extensions granted to schools using Provision 2 and Provision 3 during the previous school year; (iv) The number of extensions granted during the previous year on the basis of SNAP/FDPIR data; (v) The number of extensions granted during the previous year on the basis of Temporary Assistance for Needy Families (TANF) data; (vi) The number of extensions granted during the previous year on the basis of local data collected by a city or county zoning and/or economic planning office; (vii) The number of extensions granted during the previous year on the basis of applications collected from enrolled students; (viii) The number of extensions granted during the previous year on the basis of statistically valid surveys of enrolled students; and (ix) The number of extensions granted during the previous year on the basis of alternate data as approved by the State agency's respective FNS Regional Office. (5) State agency approval. (i) No later than February 1, 2013, and by February 1st each year thereafter, each State agency must collect annual verification data from each local educational agency as described in § 245.6a(h). Each State agency must analyze these data, determine if there are potential problems, and formulate corrective actions and technical assistance activities that will support the objective of certifying only those children eligible for free or reduced price meals. No later than March 15, 2013, and by March 15th each year thereafter, each State agency must report to FNS, in a consolidated electronic file by local educational agency, the verification information that has been reported to it as required under § 245.6a(h). State agencies are encouraged to collect and report any or all verification data elements before the required dates. (Secs. 801, 803, 812; Pub. L. 97-35, 95 Stat. 521-535 (42 U.S.C. 1753, 1758, 1759(a), 1773, 1778)) [35 FR 14065, Sept. 4, 1970. Redesignated at 79 FR 7054, Feb. 6, 2014] Editorial Note: For Federal Register www.govinfo.gov. § 245.13 State agencies and direct certification requirements. (a) Direct certification requirements. (b) Direct certification performance benchmarks. (1) 80% for the school year beginning July 1, 2011; (2) 90% for the school year beginning July 1, 2012; and (3) 95% for the school year beginning July 1, 2013, and for each school year thereafter. (c) Data elements required for direct certification rate calculation. (1) Data Element #1 (2) Data Element #2 (3) Data Element #3 (d) State notification. (e) Continuous improvement plan required. (f) Continuous improvement plan required components. (1) The specific measures that the State will use to identify more children who are eligible for direct certification, including improvements or modifications to technology, information systems, or databases; (2) A multiyear timeline for the State to implement these measures; (3) Goals for the State to improve direct certification results for the following school year; and (4) Information about the State's progress toward implementing other direct certification requirements, as provided in FNS guidance. (g) Continuous improvement plan implementation. [78 FR 12230, Feb. 22, 2013. Redesignated at 79 FR 7054, Feb. 6, 2014; 81 FR 50210, July 29, 2016] § 245.14 Fraud penalties. (a) Whoever embezzles, willfully misapplies, steals, or obtains by fraud any funds, assets, or property provided under this part, whether received directly or indirectly from the Department, shall— (1) If such funds, assets, or property are of a value of $100 or more, be fined not more than $25,000 or imprisoned not more than five years of both; or (2) If such funds, assets, or property are of a value of less than $100, be fined not more than $1,000 or imprisoned not more than one year or both. (b) Whoever receives, conceals, or retains to his use or gain funds, assets, or property provided under this part, whether received directly or indirectly from the Department, knowing such funds, assets, or property have been embezzled, willfully misapplied, stolen, or obtained by fraud, shall be subject to the same penalties provided in paragraph (a) of this section. (Sec. 10(a), Pub. L. 95-627, 92 Stat. 3623 (42 U.S.C. 1760); sec. 14, Pub. L. 95-627, 92 Stat. 3625-3626) [Amdt. 14, 44 FR 37901, June 29, 1979, as amended at 64 FR 50744, Sept. 20, 1999. Redesignated at 78 FR 12230, Feb. 22, 2013, and further redesignated at 79 FR 7054, Feb. 6, 2014] § 245.15 Information collection/recordkeeping—OMB assigned control numbers. 7 CFR section where requirements are described Current OMB control number 245.3 (a), (b) 0584-0026 245.4 0584-0026 245.5 (a), (b) 0584-0026 245.6 (a), (b), (c), (e) 0584-0026 245.7(a) 0584-0026 245.9 (a), (b), (c) 0584-0026 245.10 (a), (d), (e) 0584-0026 245.11 (a), (a-1), (b), (c), (d), (f) 0584-0026 245.13(a)-(c) 0584-0026 [72 FR 68985, Dec. 6, 2007, as amended at 73 FR 11312, Mar. 3, 2008. Redesignated at 78 FR 12230, Feb. 22, 2013, and further redesignated at 79 FR 7054, Feb. 6, 2014]