USDA School Food Service Funds for School Garden Supplies Valued under $5,000
Question: Can a school food authority (SFA) use nonprofit school food service funds to buy supplies or equipment for the school garden or school farm?
Answer: if the garden is used within the context of the school meal programs and serves the purpose of operating and improving the school meal program, supplies and equipment for the school garden may be purchased with funds from the nonprofit school food service account as long as the purchase is "necessary, reasonable, and allocable."
To assess whether the expenses are "necessary, reasonable, and allocable,"
USDA has developed a series of three questions that an SFA can use.
1. Could the CE justify the purchase to USDA, TDA, the media, or auditors? Would a taxpayer deem the cost to be appropriate for the objectives of the SNP?
2. Would a prudent person consider the cost to be reasonable? Is the cost charged at a fair rate or do alternatives exist that may be more cost effective?
USDA School Food Service Funds for School Garden Equipment Valued at More Than $5,000
Also noted in USDA memo
is the purchase of equipment or supplies with an acquisition cost greater than $5,000.
Classifying movable structures (e.g., hoop houses, high and low tunnels) as a supply or equipment is dependent upon the acquisition cost. If these items have an acquisition cost less than $5,000, they are considered supplies. Other supplies such as seeds, fertilizers, watering cans, rakes, etc., would also be considered supplies so long as the products grown in the school garden are used within the context of the child nutrition program. Equipment costs exceeding $5,000 require written approval from the Texas Department of Agriculture.
Definition of capital equipment (2 CFR Part 225 Appendix B Section 15): "an article or non-expendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds ... $5,000."
A capital expense request may be used to support a school garden program. However, consider the answers to the following questions before submitting a capital expense request:
Will more than just the child nutrition division be using and benefiting from the school garden?
If the answer to this question is yes, will each team be contributing proportionately to the overall cost of the project
Will the proposed acquisition increase the property value of the facility?
If the answer to this question is yes, a capital expense request is likely not the right avenue to fund this project. Consider hosting a fundraiser or working to identify an alternative funding source.
Is the expense reasonable?
If the answer to this question is no, you must seek new bids or look for an alternative vendor for this supply purchase.
How to Submit a Capital Expense Request
2. Enter the Application tab and click "Capital Expenditure Request."
3. Select the option to "Create a New Request."
4. Complete the data fields and follow all instructions on the application page to complete a new Capital Expense request.
Contact your local ESC office if you have additional questions about submitting a capital expense request.