42 U.S.C. § 1776 — State administrative expenses

(a) Amount and allocation. (1)(A) Each fiscal year, the Secretary^* must make available to the States for administrative costs at least 1.5 percent of the Federal funds spent under sections 4, 11, and 17 of the Richard B. Russell National School Lunch Act and sections 1772 and 1773 of this title during the second preceding fiscal year. (B) The Secretary must allocate these funds under paragraphs (2), (3), and (4). (2)(A) Subject to subparagraph (B), the Secretary must give each State^* for administrative costs connected with programs under the National School Lunch Act or this chapter, except the programs under section 13 or 17 of that Act or section 1786 of this title, at least 1 percent and at most 1.5 percent of the funds that State spent under sections 4 and 11 of that Act and sections 1772 and 1773 of this title during the second preceding fiscal year. (B)(i) A State's grant may not be less than the amount allocated to it for the fiscal year ending September 30, 1981, or $200,000 adjusted under clause (ii), whichever is larger. (ii) On October 1, 2008, and every October 1 afterward, the minimum dollar amount must be adjusted for the percentage change between the Bureau of Economic Analysis index for State and local government purchases for the 12 months ending June 30 of the second preceding fiscal year and that index for the 12 months ending June 30 of the preceding fiscal year. (3) For State administrative costs under section 17 of the National School Lunch Act, the Secretary must allocate an amount based on the State's spending under that program in the second preceding fiscal year: 20 percent of the first $50,000; 10 percent of the next $100,000; 5 percent of the next $250,000; and 2.5 percent of the rest. If an agency other than the State educational agency runs the program, the State must give that agency at least the amount due under this paragraph for its administrative costs, except as paragraph (5) provides. The Secretary may adjust a State's allocation for changes in program size. (4) The Secretary must distribute the remaining money in amounts the Secretary considers necessary to improve State administration of the programs under the National School Lunch Act and this chapter, except section 1786, including program integrity and meal quality. (5)(A) No more than 25 percent of a State's fiscal-year-1991 allocation, and no more than 20 percent of its allocation for fiscal year 1992 and later years, may remain available into the next fiscal year. (B)(i) Each fiscal year, money not obligated or spent and not carried over must be returned to the Secretary. (ii) The Secretary must distribute the remaining money for administrative costs among States that show a need. (6) A State may use funds under this subsection and section 13(k)(1) of the National School Lunch Act for administering programs under this chapter, except sections 1786 and 1790, and that Act, without regard to how the funds were earned or allocated. (7) If the Secretary administers programs under this chapter or that Act, the Secretary may retain for that work the amount that otherwise would go to the State agency. (8) Beginning in fiscal year 1991, each State must ensure under the Secretary's regulations that the State agency distributing commodities under this chapter and the National School Lunch Act receives an appropriate amount from these funds for distribution costs. The Secretary may consider the value of the commodities provided when making the regulations. (9)(A) If the Secretary finds that a State's administration of a covered program, including required training, technical help, and monitoring of the child and adult care food program, or its compliance with a regulation is seriously deficient, and the State does not correct the problem within the specified time, the Secretary may withhold some or all of the funds allocated under this section, section 13(k)(1), or section 17 of the National School Lunch Act. (B) If the Secretary later finds that the administration or compliance is no longer seriously deficient and is acceptable, the Secretary may allocate some or all of the withheld funds.

(b) Uses. A State may use these funds for salaries, employee benefits, and travel expenses of administrative and supervisory personnel; support services; office equipment; and staff development.

(c) Adjustment. If a State agency takes over food-service programs in nonprofit private schools or child-care institutions previously administered by the Secretary, the administrative funds paid to the State must be appropriately adjusted no later than the next fiscal year.

(d) Unused funds. Funds remain available for the State to obligate and spend during the fiscal year immediately after the year for which they were provided. Each fiscal year, the Secretary must set a deadline for States to submit plans for distributing that year's funds and must reallocate unused funds shown by those plans to other States as appropriate.

(e) Plans. (1) By October 1 of the initial fiscal year, each State must submit for approval a plan describing its use of administrative funds, including a staffing formula for State, system-level supervisory and operating, and school-level personnel. (2)(A) After the initial plan, a State need submit only a substantive change for approval. (B) Each plan must explain how technology and information systems will improve integrity by (i) monitoring meal nutrients; (ii) training local educational agencies, school food authorities, and schools to use those systems, including checking free or reduced-price eligibility with participation or income data collected by State or local agencies; and (iii) using electronic data to set benchmarks for comparing and monitoring integrity, participation, and financial data. (3) Each State must submit for approval a plan explaining how it will carry out subsection (g) and section 22(b)(3) of the National School Lunch Act.

(f) State funding condition. Payments may go only to States that agree to keep State-revenue funding for administration of covered programs at least at the amount spent or obligated in fiscal year 1977 and to fully participate in studies authorized by the Secretary.

(g) Professional standards and training. (1)(A)(i) The Secretary must establish required education, training, and certification for every school food-service director^* responsible for managing a school food authority. (ii) The program must include minimum education needed to manage the school lunch and breakfast programs; minimum training and certification standards; and minimum periodic training to maintain certification. (B) The Secretary must establish criteria and standards for States selecting State-agency directors responsible for those programs. (C) The Secretary may assist professional food-service-management organizations in establishing and managing this program and creating voluntary training and certification for other food-service workers. (D)(i) The Secretary must set a date by which covered school food-service directors must meet the standards. (ii) The Secretary must set a date by which State agencies must meet the selection standards for covered State-agency directors. (2)(A)(i) At least yearly, each State must train local educational agency, school food authority, and other appropriate personnel in application, certification, verification, meal-counting, and meal-claiming procedures. (ii) The Secretary must either give that training and technical help to the State or give it directly. (iii) Under the Secretary's procedures, each local educational agency or school food authority must ensure that each person conducting or overseeing those procedures is trained at least yearly, unless the Secretary decides otherwise. (B)(i) The Secretary must provide training to improve accurate approval of free and reduced-price meals and identification of reimbursable meals where they are served. (ii) Under the Secretary's criteria, local food-service personnel must complete yearly training and receive yearly certification to ensure compliance and integrity and show competence in the training under clauses (i) and (iii). (iii) Training must include nutrition; food allergies, including best practices^* to prevent, recognize, and respond to allergic reactions; health and food-safety standards and methods; and other topics the Secretary considers appropriate. (3)(A) From Treasury money not otherwise appropriated, the Treasury Secretary must transfer to the Secretary, available until spent, $5,000,000 on October 1, 2010, and $1,000,000 on each October 1 afterward. (B) The Secretary may receive, accept, and use those funds for this subsection without another appropriation.

(h) Training and review funding. (1)(A) On October 1, 2004, and every October 1 afterward, the Treasury Secretary must transfer $4,000,000 to the Secretary of Agriculture from Treasury money not otherwise appropriated, available until spent. (B) The Secretary may receive, accept, and use it without another appropriation. (2)(A) Except as subparagraph (B) provides, the Secretary must use it to help States carry out subsection (g) and administrative reviews of selected local educational agencies under section 22 of the National School Lunch Act. (B) The Secretary may keep part for activities performed instead of a State. (3) Allocation is based on the number of local educational agencies showing a high level of, or high risk for, administrative error, as the Secretary determines while considering the 2004 Child Nutrition and WIC Reauthorization Act and its amendments. (4) The Secretary may reallocate unspent or unobligated amounts.

(i) Technology infrastructure. (1) Each State must submit for approval an amendment to its subsection (e) plan explaining use of funds for technology and information systems. (2) It must explain how the State will improve integrity by (A) monitoring meal nutrients; (B) training local educational agencies, school food authorities, and schools to use technology for (i) menu planning, (ii) collecting point-of-sale data, and (iii) processing free and reduced-price applications; and (C) using electronic data to set benchmarks comparing and monitoring integrity, participation, and financial data across schools and school food authorities. (3)(A) If paragraph (4) funds are available, the Secretary must competitively give States money for grants to local educational agencies, school food authorities, and schools to help buy or upgrade technology and information systems used in programs under this chapter, except section 1786, and the National School Lunch Act. (B) To receive a grant, a school or school food authority must submit a plan addressing possible savings and integrity methods, including (i) processing and verifying free and reduced-price applications; (ii) combining menu-planning, production, and serving data to monitor compliance with section 9(f)(1) of the National School Lunch Act; and (iii) compatibility with statewide reporting systems. (4) Congress authorizes whatever sums are needed for this subsection in fiscal years 2010 through 2015, available until spent.

(j) General funding. For the fiscal year beginning October 1, 1977, and each later fiscal year ending before October 1, 2015, Congress authorizes whatever sums may be needed for this section.