Guidance for School Food Authorities (SFAs) with Excess Net Cash Resources in Fund 02 

In early February each school year, SFAs with excess net cash in Fund 02 receive a notice from MDE informing their Business Manager and Food Service Director of the need to reduce the surplus. At that time, the SFA is required to submit a plan to MDE explaining how they will adhere to federal regulations and MN state statutes while spending the excess funds. Once approved, the SFA is expected to follow the agreed-upon plan to bring its program into full compliance with regulations. An SFA’s plan must outline how it will use the excess funds for legitimate, allowable costs within the school food service program.   

Allowable costs are as follows: 

• Food purchases: Ingredients and supplies needed to prepare meals. 

• Labor costs: Salaries and wages of food service staff. 

• Equipment: Purchasing new equipment or replacing existing equipment. 

• Capital outlay: Approved kitchen renovations related to equipment installation and operation. 

Paid Lunch Equity (PLE) Exemption for School Year 2025–26 

In Minnesota, schools that participate in the United States Department of Agriculture’s (USDA) National School Lunch Program (NSLP) must participate in the state funded Minnesota Free School Meals Program (MN-FSM). The MN-FSM program is considered non-pricing and therefore operators are exempt from PLE requirements in accordance with USDA Policy SP 39-2011-Revised.  

School Food Authorities (SFAs) Must Report Health Inspections  

Nutrition Program Services is required by the USDA to collect data on health inspections for every school site that participates in the National School Lunch Program and School Breakfast Program.  

• Every sponsor participating in these programs will receive an email with a link to the report that must be completed for SY 2024–25 by June 30, 2025.  

• The email will be sent to the SFA contact listed in the sponsor application.  

• The sponsor will need to report the number of health inspections conducted between July 1, 2024 and June 30, 2025 for each approved site in The Cyber-Linked Interactive Child Nutrition System (CLiCS).  

Additional information and instructions will be included in the email sent to the SFAs.  

Questions? Please contact us at mde.fns@state.mn.us. 

School Food Service Contract Renewals and Requirements 

School Food Authorities (SFAs) contracting with a vended meal provider or foodservice management company (FSMC) are required to follow renewal timelines and documentation requirements.  

• FSMC contracts may be renewed annually for up to four years (maximum five-year term). After five years, a new contract is required. An example is an initial contract for July 1, 2020 to June 30, 2021, is allowed renewals through 2024-25 school year with a new contract being required by July 1, 2025.  

• Renewals must include a copy of the FSMC renewal contract and Reconciliation of USDA Credits Form. Submit both to: mde.fsmc@state.mn.us. Forms can be found on the MDE School Nutrition Procurement webpage. 

• Compliance of USDA foods crediting must be documented for a renewal contract to be approved by the state agency. Per federal regulations at 7 CFR 250.53, all USDA Foods values must be credited to the SFA, regardless of vendor usage. 

For questions or assistance regarding crediting documentation requirements, Email: mde.fsmc@state.mn.us. Prior to SY 2025–26, MDE will offer sessions on Procurement (e.g., Group Purchasing Organizations (GPOs), micro-purchasing), contract administration (FSMC, vended meals), USDA Foods handling, and financial accountability.

Sponsors should check the MDE calendar and subscribe to the Nutrition Program Bulletin for updates.