State Administrative Expense Funds: National School Lunch Program, Special Milk Program for Children, School Breakfast Program, Child and Adult Care Food Program, Food Distribution Program

This rulemaking incorporates in the regulations the requirements in the Child Nutrition and WIC Reauthorization Act of 1989, which concern State Administrative Expense (SAE) funds. SAE funds are Federal funds provided to State agencies to assist with the administrative costs of the National School Lunch Program (NSLP), the School Breakfast Program (SBP), the Special Milk Program for Children (SMP) and the Child and Adult Care Food Program (CACFP) and the administrative costs of the Food Distribution Program (FDP) in conjunction with these programs. The SAE provisions of the 1989 legislation included in this final rulemaking do the following: Establish limits on the level of SAE funds that may be retained by the State from one fiscal year to another and specify how SAE funds that are returned by the State are to be redistributed. Finally, the legislation provides that alternate State agencies which administer the CACFP receive the funds to which they are entitled. In practical effect, this provision concerns the ``adult care component'' of the CACFP since the Department already provides funds directly to the State agencies administering the CACFP. This final regulation reflects this statutory provision. These changes to the SAE provisions are designed to ensure that adequate funds are available for the purposes specified.