8 questions to ask before using federal funds to purchase food
While preparing for the 2020-21 school year amid the COVID-19 pandemic, school districts in states that allow gatherings should be careful when considering whether to use federal funds to purchase food for events they are hosting. Events, such as professional development sessions and annual parent meetings, might be an allowable cost to buy food, but only if the district can prove that the expense is reasonable and necessary.
To be considered reasonable and necessary, 2 CFR 200.404(a) requires that the cost is recognized as ordinary and necessary for the operation of the nonfederal entity or the proper and efficient performance of the federal award.
In Frequently Asked Questions to Assist U.S. Department of Education Grantees to Appropriately Use Federal Funds for Conferences and Meetings, 120 LRP 5154 (EDU 03/01/17), the U.S. Education Department explained that there is a high burden of proof to show that using federal funds for food and beverages is necessary to meet the goals and objectives of a federal grant. Because of this high burden of proof, many states and school districts simply avoid the risk of being out of compliance and do not allow Title I to be spent on food. Alternatively, they impose restrictions on food expenses using Title I funds.
The high burden discourages some districts from serving food purchased with federal funds altogether. Shoua Vang, field services financial unit manager for the Michigan Department of Education, said that in the past, the state used to approve such costs. However, based on ED’s FAQs and EDGAR trainings, the state pulled back from approving those costs with food. “In short, it is best to not use Title funds for the purchase of food and beverages,” she says.
According to Title I, Part A of the Elementary and Secondary Education Act of 1965, as Amended by the Every Student Succeeds Act: Providing Equitable Services to Eligible Private School Children, Teachers, and Families, 119 LRP 38894 (EDU 10/07/19), as appropriate, Title I meetings may include light refreshments for parents and families to facilitate attendance at those meetings. An appropriate use of federal funds to purchase food means, for example, that districts may want to limit the food offered to light refreshments, such as cupcakes, chips, salsa, cheese, crackers, and coffee. A school district may also consider providing an inexpensive meal, such as pizza or spaghetti dinners, and justify using Title I funds as necessary because the event takes place over the dinner hour.
ED’s FAQs notes that determinations allowing federal funds to pay for food will be made on a case-by-case basis. So grantees should be prepared to justify their food costs. ED’s FAQs also suggest consulting with the program attorney.
Before spending federal funds to pay for food, beverages and snacks at a school event, ask the following questions:
- Can the school district event be considered a unique circumstance to use federal funds to pay for food, beverages, and snacks?
- Why is such event a unique circumstance where the cost would be permissible to use federal funds to pay for food, beverages, and snacks?
- Would the event schedule provide enough time for participants to purchase their own food, beverages, and snacks?
- Is the event location near a place where participants can purchase their own food, beverages, and snacks beforehand?
- How can the school district prove that paying for food and beverages with federal funds is reasonable and necessary for the event to occur?
- How can paying for food and beverages with federal funds help the district meet the goals and objectives of the federal grant?
- What documentation does the school district need to evince that paying for food and beverages with federal funds can help it meet the goals and objectives of the federal grant?
- Should the district consult with their program attorney before making the decision to use federal funds to provide food, beverages, and snacks for an event?
Claude Bornel covers ELs and other Title I issues for TitleIAdmin, a DA sister publication.