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III. ELIGIBILITY/AGREEMENTS

A. School food authorities are eligible to participate in the food distribution program if certain criteria are met. Those school food authorities that are eligible to participate are listed below:

1. "School" - an educational unit of high school grade or under operating under public or non-public ownership. The term "high school grade or under" includes classes of primary or higher grade or when they are recognized as part of the educational system in the State, regardless of whether such pre-primary classes are conducted in a school having classes of primary or higher grade. Additionally, schools must be in compliance with civil rights requirements.

Refer to (Exhibit 1) for an example of the application/agreement for food distribution program participation.

IV. AVAILABLE COMMODITIES

Schools are eligible for a certain dollar level of commodity assistance based on the number of lunches served during the year (July 1 through June 30) times the mandated rate of assistance. Commodities that are offered to school food authorities against the dollar amount of their Commodity Assessment Survey are considered entitlement foods. Other foods may be offered to school food authorities for which there is no charge to the school food authority's entitlement.. All foods are offered or made available on a use without waste basis, and must be used within a six months time period.

Some "Group A" items are occasionally offered as a limited bonus. Grain, oils, and dairy foods are "Group B", although some of these foods (mainly dairy products) may be classified in the bonus category.

The commodities that USDA purchases may very from time to time depending on what food products are available. Because of the nutritional needs of participants in programs such as child nutrition, USDA purchases and makes available these types of commodities.

Commodities generally available for the National School Lunch Program include frozen and canned meat and poultry; canned, fresh, and frozen fruits; vegetables and juices; dairy products; cereals and grains; vegetable oil and shortening; and peanut products.

USDA has been increasing the types of commodities available for distribution. Today more than 50 different commodities are purchased for distribution to the various food assistance programs.

All of the commodities that USDA purchases must be certified by the USDA's inspection services to assure they meet established specifications. Specifications for the quality of the commodities purchased are constantly updated. Recently, revised specifications have reduced the fat, sugar and salt contents of foods purchased. Updated specifications also improve the cooking quality of the commodities purchased.

V. ALLOCATIONS AND ORDERING

Commodity allocation is a two-fold process. The Commodity Preference Survey is provided to the school food authority by the state distribution agency. Foods are made available based on the dollar level established.

A. Determination of Dollar Levels

Each year USDA provides the state distribution agency a dollar level of entitlement. This entitlement is determined by multiplying the number of reimbursable lunches served by the commodity assistance rate. The total entitlement is divided into Group A and Group B. Generally, the total entitlement is divided between Group A commodities and Group B commodities based on the availability of items in each group.

Schools can elect to choose their entitlement percentage.

The per lunch entitlement is provided by Federal legislation. The computation for each school food authority is based upon the number of lunches served by each said agency. The number of lunches data is provided to food distribution by the North Carolina Department of public Instruction, Child Nutrition Section.

NOTE: Breakfast data is not included in this computation; however, commodities may be used for this meal.

B. Making Foods Available

Commodities are purchased by USDA based on a number of factors such as: market conditions, the amount, types and cost of foods available. Several activities occur at the State and local levels in the allocation process. These activities are discussed below:

1. Acceptability Report

NCDA&CS - FDD will survey schools on new products to get their input on preferences.

C. Ordering Commodities (Exhibit)

1. Group "A" Foods

When USDA informs the state distribution agency of actual or estimated quantities or specific Group A commodities expected to be made available, the state distribution agency initially allocates the commodities to school food authorities on a requested basis. NC 209 Reports are forwarded to each school food authority monthly in order to inform them of what items are delivered and to be delivered.

2. Group "B" Foods

Group B commodities are ordered on the basis of the Commodity Preference Survey for each recipient agency.

3. No Charge Foods (BONUS)

Foods that are declared "Bonus", regardless of their prior classification, will be pro-rated to all recipient agencies.

4. Right to Refuse

If the school food authority does not wish to receive the commodity allocated, the school food authority may exercise their right to refuse. Please notify your respective warehouse if you wish to refuse the commodity.